A couple of weeks ago, a knowledgeable supply chain professional who also serves as the COO of a large Chicago area food company gave me a sobering prediction: For at least the first two quarters of 2022, shippers are going to be dealing with transportation and supply chain challenges like they have never seen before. Why is that?
For starters, with the Omicron variant having a significant impact on labor forces, he predicted that it would only be a matter of time before shoppers started to see bare shelves in grocery stores and other “Big Box” retailers. Sure enough, his prediction has become a reality with media outlets reporting a higher level of stock-outs in grocery stores, flight cancellations, and other disruptions.
My friend also noted that with carrier capacity remaining tight, there is no excess supply to recover from disruptions that are occurring more frequently. Whereas inventory levels were healthy when the pandemic and its impacts began, new disruptions are piling onto supply chains that have already been damaged. Add it all up, and C-Level executives are getting an expensive education about how the strength of their underlying supply chains can have a huge impact on a company’s financial success.
Over the past couple of months, I have given several presentations to hundreds of executives echoing the messages in my recent Logistics Management blog: Note to CEOs: Your supply chain issues will not fix themselves!
First, great supply chains don’t just happen by accident--they happen by design! And implementing the proper design will require changes and an investment level that will require approval from the C-Suite.
Second, C-Level executives need to be engaged in understanding how the processes in their procurement, operations and sales areas affect their supply chain capabilities. After one logistics professional read my blog, he sent me a note sharing one practical way C-Level executives could understand a bit more about why their company is having supply chain issues: Take a walk on the docks.
Specifically, he encouraged me to challenge C-Suite executives to walk on their company’s docks and let them know that if they see a sign that says, “Drivers Can’t Use Bathroom,” there are issues. Chances are their company doesn’t have great carrier relationships and is paying higher freight rates or struggles with having carriers show up. In short, there is room for improvement in their transportation and supply chain areas.
Are you ready for more shortages? Is your supply chain damaged? Contact us to see how we can help you restore health to your supply chain and position your company for success in any environment.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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