I am convinced that whoever uttered these famous words, "may you live in interesting times" must have been a logistics or supply chain professional. If you are involved in the logistics or supply chain areas in your company, you are certainly dealing with interesting things - things that can make managing your supply chain extremely interesting.
This week's supply chain adventures include the likelihood of a strike at some important ports in Canada as employers locked out union workers who were threatening to go on strike at the Port of Vancouver and the Port of Prince Rupert in British Columbia. The Port of Montreal is also dealing with an ongoing strike, and altogether these actions affect a significant portion of freight in Canada.
But the impact of these disruptions are not limited to Canada. Shippers live in an interconnected supply chain in North America. When you have strikes at ports, hurricanes or events which cause disruptions, transportation assets get redeployed to keep the freight moving. Several ships are at anchor at these ports in Canada with freight destined for the United States.
Shippers also need to watch what is happening at the US East Coast ports. The threat of a strike is real if the contract between the ILA and the USMX is not resolved before January 15, 2025. The increased use of automation is contentious. In our recent webcast, we highlighted three things that shippers should be doing today to protect themselves if in fact there is a strike at these ports after January 15th.
Now, let's switch gears. We invite you to check out this recent Talking Logistics Podcast that was hosted by my friend Adrian Gonzalez. When Adrian invited me to be on the podcast, we both agreed that it should focus on some important points and tips about how companies can improve their supply chains.
Having addressed this very topic in talks to a couple of thousand C-Level executives over the years, here are some key points that we covered on the podcast.
First, companies need to stop guessing when it comes to managing their supply chains.
Practically speaking, most C-Level level executives say that having a good supply chain is critically important to the success of their organization. But, actions speak louder than words. Even though they say supply chains are important they don’t have a written supply chain plan. Their supply chains processes and procedures are based on assumptions instead of being based on facts, data, and analytics. When we see supply chains built on assumptions, inevitably we see wasteful inefficient processes that are costly and hurting a company's bottom line.
Second, recognize that supply chains impact balance sheets.
Over the years, Adrian and I have talked about a stumbling block encountered by many supply chain and logistics executives: They need to speak the language of the CFOs and CEOs. For example, during some of my talks I often ask this question to logistics and supply chain professionals: “What is one day's worth of inventory, or one day of cash worth to your organization?” As we addressed in the podcast you may not know the answer to this question, but trust me, your CFO certainly does and they may be evaluating your budgets and requests for investments. Your supply chain has a direct impact on the receivables, inventories, and payables numbers on your company’s balance sheets.
We're not the only ones calling this out. If you are interested in sending a request, I'd be happy to share a great article from McKinsey called “Supply chains: still vulnerable” that highlights how a lot of executives are not prepared to discuss the effect of their supply chains on financial performance. Towards the end of the article, they also touched on why supply chain executives need a seat at the boardroom table.
Adrian and I closed out our podcast by looking at ways companies can tackle these critical logistics and supply chain issues in 2025.
As always, if you’re really interested in building a better supply chain, we have a wealth of practical tools that can help you do just that: Build a better supply chain. To learn more, simply contact us or better yet, let’s set up a one–on–one discussion via Calendly.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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