Supply-Chain Overhaul Needed.

The newer models of companies divesting themselves from manufacturing divisions and outsourcing manufacturing to locations around the world may have to evolve, and perhaps even reverse to earlier practices, suggests Tenpao Lee, professor emeritus of economics at Niagara (N.Y) University, who indicates that the pandemic has "changed everything," and serious revisions will be necessary to make sure consumers have the goods they need without the current backlogs for certain items, especially appliances, automobiles, electronics, and other goods requiring multiple parts.

The global economy has flourished since the 1980s. Due to worldwide competition, companies modularized their products into multiple pieces and outsourced a significant portion of their production to suppliers in many different countries. For example, Apple's iPhone has more than 300 suppliers in 20 different countries. A personal computer may have components produced by more than 100 sources.

The result has been that companies are virtually and vertically integrated. With a lead company, all suppliers have separate identities, working together to serve their final customers better. They are strategic partners with no direct control of one another. Lee explains.

Most only kept their core businesses and outsourced everything else, including logistics and transportation. The...