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Why Are We Out of…well, EVERYTHING?
It certainly seems like we are suddenly short of many key materials in our business and personal lives. First it was toilet paper – then corrugated boxes – now semiconductors, things that semiconductors go into, clothing, shoes, and more. What in the world is going on? And how is supply chain “resilience” related to solving it?
At the beginning of the pandemic, factories closed, people were locked down, restaurants shut their doors, and consumption patterns changed dramatically. Items that we took for granted, like toilet paper and disinfectant, were suddenly unavailable. While hoarding was a key contributor (admit it, you still have some paper towels you bought last summer), the sudden shift from office to home accelerated demand for home electronics, desks, prepackaged foods, and many other items. With suppliers shut down, it was very difficult to meet the rapidly changing demand. Supply chains were unable to immediately gear up for a “new normal”.
Producers and supply chains rallied, learned to adapt, and heroically started to increase availability of the things we now wanted, like hand sanitizer, ventilators, and face masks. But production was only part of the supply chain – how could we get the “stuff” to the right place at the right time?
The field of logistics includes the transportation, storage, and distribution of goods. Over the past decades, supply chains have lengthened due to overseas suppliers and customers, and the time to replenish supplies at the point of use has become longer. As demand picked up, the existing logistics structure struggled to cope with both the changing points of demand and, this year, the sudden increase in volume. Compounding this was a container ship grounding that closed the Suez Canal for a week and shut down a key logistics channel. When the goods did reach the port of destination, the port facilities were unable to handle the increased volume. Finally processed through, the items still needed transportation to the final consumer. And that was – and is – a problem due to a lack of…
Stevedores, truck drivers, warehouse workers – suddenly there is a shortage of workers in many industries, including manufacturing, services, logistics and supply chain. Is this a result of the pandemic, of more personal opportunity, or some other cause? It may be too soon to understand the causes, but the short-term result is higher wages, delayed deliveries, and higher prices.
Supply Chain Resilience
What to do? In the short term, we need to meet immediate needs, but also examine our entire supply chain. There WILL be supply/demand imbalances in the future, and they may happen very quickly. You need to map your supply chain, beginning to end, and make changes to allow you to react more quickly. This may include multiple sources, more local purchases, and holding more inventory.
How Experience on Demand can help improve your company’s supply chain logistics.
We’ll start by having a conversation to help spot the major pain points and opportunities in your entire supply chain – beginning to end. From there, we’ll help you map out a plan ideally suited to your company’s needs using real-world, tested solutions to guide our process and provide you a workable, flexible plan that will allow you to better manage your supply chain and ultimately, benefit from the results.