Lately I’ve been giving several presentations about supply chain issues. In these presentations I frequently emphasize the value of periodically engaging in scenario planning exercises. These exercises can help companies proactively address issues which could potentially disrupt their supply chains.
Can I level with you? Some people think they are just too busy to find the time for scenario planning.
So in a presentation I gave last week, I highlighted the fact that there are multiple issues on the table that could really wallop your supply chain over the next 6 to 9 months. And if your company has not utilized scenario planning to consider these threats, good luck. You will more than likely be “reacting” versus “responding” if and when these events occur.
For example, on Monday news broke that a major rail union rejected the proposed labor contract, putting the possibility of a strike back on the table. The latest decision comes from the Brotherhood of Maintenance of Way Employees Division (BMWED) which is the third largest of the twelve rail unions. According to the union there could be a strike in the future, but not until November 19.
FreightWaves reported that four unions have ratified agreements with the railroads but two of the largest rail unions have yet to vote. They will be mailed ballots in late October that allow a 21-day voting period. With this timeline, the outcome should be known in mid-November around the time that the BMWED may strike.
For those who think “Big deal, I’m not a rail shipper” guess again! According to Truckstop.com, one third of our nation’s freight moves on the railroads. UPS is one of the BNSF’s largest customers. And LTL carriers like Yellow, XPO and many others rely on the railroads to move their trailers for long-distance shipments. So yes, almost every shipper will likely be affected by rail disruptions.
If the unions were to strike, Congress would likely intervene and order them back to work. But, even a short rail strike or a minimal work stoppage would likely have a significant impact on your supply chain. Have you gotten your team together and considered how your company would manage if this unlikely event occurred?
One of my favorite business books is Predictable Surprises: The Disasters You Should Have Seen Coming and How to Prevent Them. This book explains how even the best run companies have gotten blindsided by events that they could have seen coming, and how to prevent that from happening.
Folks, there are plenty of “Predictable Surprises” that could affect your supply chains. And that is why we recommend companies draft a written supply chain management plan that addresses the “What If” questions and issues that could really disrupt your supply chains.
For the doubters among you, do me a favor: send me an email or give me a call and I’ll give you at least four items that need to be on your supply chain radar screen as you head into 2023.
If you can't reach out because you’re too busy, can’t be bothered, or believe there is nothing to be worried about when dealing with supply chain issues, I understand. The only thing I can do is to say to you the same words my mother would say to me when I thought I had all the answers: “Bueno Suerte. Vaya Con Dios!”
If you are concerned (and I trust you are) about protecting your supply chain, I’d love to share with you some thoughts about issues that should be part of your supply chain scenario planning process.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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