The 2:00 Minute Warning

Over the last several months, I’ve given many presentations about the events and potential changes impacting supply chains.

After one of them, an individual approached me with a very interesting observation: “It’s not just that these things occurred, it's that we were blindsided by them. We never saw it coming.”

I assured him that he had a lot of company. Personally, I’ve lost track of the number of conversations I’ve had with executives that made similar comments about being caught off guard by recent events. That's because they were taking their supply chains for granted.

Soaring container rates, sky high charges for detention and demurrage, and numerous issues faced by truckload and LTL carriers have created chaotic conditions on the supply chain front over the past two years. And when chaos meets confusion on the supply chain front, bad things happen.

Whether it’s freight budgets going through the roof or service issues impacting a company’s ability to get products or satisfy customers, a lot of executives are finally waking up to the fact that their company’s supply chain capabilities can make or break them. And with disruptions becoming the “new normal,” more companies are starting to ask: "How do we move our logistics operations from being constantly catching up to being out front?"

First, smart shippers understand the value of mapping and stress testing their supply chains. If you’re interested in learning more about this topic, check out our interview with MIT Professor David Simchi-Levi.

Second, once your company has mapped its supply chain you’ll be in a much better position to create a written Supply Chain Management Plan that addresses how your company manages an area that can typically represent 12% to 20% of your sales dollars. You also may want to look at creating a Transportation Spend Management Plan that addresses how your company sources and procurers transportation, and addresses potential contingencies which could impact your freight budgets.

Third, be aware of the issues in the marketplace that could impact your supply chain. For example, our recent webcast with our friends from CSCMP and the NIT League shared some important insights about how the impact of AB 5 could cause drayage rates to skyrocket, what’s happening with labor negotiations at the West Coast ports, and other important issues. And when you keep up to date by checking out the Journal of Commerce, FreightWaves, Logistics Management and DC Velocity, you’re less likely to be caught by surprise. We also provide in-depth interviews and webinars to dig deeper.

Finally, if you are looking for some insights or information about how to turn chaos into order, give us a call and see how our team of experts can share their experience and expertise and help your company build a strong supply chain. We here to help and encourage you to get in touch.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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