Supply Chain Reshaping Takes Center Stage: What Worked in the Past Will Not Work in the Future
Transportation has been in chaos since the pandemic. It started with logjams at the ports that persisted for multiple years, continued with atypical events such as the ship getting stuck in the Suez Canal and truckers blocking the border of the United States and Canada, and continues to rage on with labor shortages across the board in rail, trucking, and all transportation sectors. Although these specific transportation woes will eventually come to an end, since the supply chain is interconnected, new disruptions will arise. Instead of responding to each issue, the best will use a proactive approach to successfully navigate and stand out from the crowd with high service levels.
The transportation woes have certainly proven the importance of the transportation sector. If materials and ingredients don’t move, nothing will be produced and shortages such as the baby formula and children’s Tylenol shortages will persist. If fertilizer and food doesn’t move, grocery store shelves will be bare. If chemicals are not transported by rail, purified water will become scarce and medical devices will not be produced (as anything with plastic will be an issue). The one common element in every supply chain is the need to transport materials and goods from point A to point B. Thus, what could be more important than taking the proactive approach to navigating transportation woes?
Do not assume that what worked in the past will work in the future. There is a reshaping of supply chains taking place. Supply chains are on the move. For example, manufacturers have realized they cannot rely on China and are reshoring, nearshoring, and friendly-shoring their supply chains. They are also sourcing new partners, putting backup suppliers in place, and de-risking their supply chains. Distributors and retail have also realized they must take action to avoid the fiascos that occurred in recent history. For example, they are moving freight from the Los Angeles and Long Beach ports to the East Coast ports to avoid a potential port strike and backlog at the ports. Consumers have shifted to e-commerce, accelerating the need for last-mile delivery. The only element that remains the same is the level of change.
Source: LMA Consulting / Adhesives Magazine