The 2:00 Minute Warning

In some recent Two Minute Warnings, I mentioned that I’ve been speaking at a bunch of logistics and supply chain conferences. What has been very interesting is the fact that just as you walk away from one conference thinking: “Things could not get anymore challenging for shippers” you walk in to another conference and find out: “Holy Cow! There are even more challenges on the way for shippers!”

For example, last week at the Health and Personal Care Logistics Conference, Beth Rooney from the Port at New Jersey shared some sobering information about the volume of containers hitting East Coast ports.

This week, at the Transportation and Logistics Council's outstanding conference, FreightWaves journalist Mark Solomon, talked about how Sean O’Brien’s ascension to General President of the International Brotherhood of Teamsters will affect the Union’s negotiations with UPS and other important carriers.

As I was discussing the potential impact of these challenges with a senior logistics executive, he made an interesting observation: “Mike, we are all operating in survival mode!”

Add it all up and you get a sense that even though logistics and supply chain issues are getting more attention than ever within the C-Suite, these executives may not understand what it looks like when your company has to operate in survival mode. Instead, some executives may still be taking their supply chains for granted and hoping their company can weather the storms that are affecting their supply chains.

This “taking your supply chains for granted” message was addressed earlier this year in my blog post for Logistics Management. This blog caught traction and resulted in some interviews with journalists Jeff Berman and Mitch MacDonald. In these interviews we also discussed the consequences when C-Level executives take their supply chains for granted and fail to address critical logistics and supply chain issues.

In my presentations, I ask folks to rate their supply chains on a scale from one to five with five being “world class” and one being “third world”. Companies on the low end of the scale are simply getting the supply chain they're willing to live with. Companies on the higher end of the scale have a supply chain that serves as a competitive advantage. They are also companies that know that when it comes to operating in “survival mode” the following attributes are critically important:

Identify the Top Priorities

What are your top priorities for your supply chain? Take a moment to step back and consider what the most pressing needs are both in the long term and the short term. Too often the urgent demands of the day take all our focus and can distract companies from addressing critical root cause issues with long term implications.

Map Your Supply Chain

Do you understand the risks and threats to your supply chain? While some risks may be very unexpected, others are what I like to call "predictable surprises". For example, with a ILWU contract up for negotiations, potential disruptions at the West Coast Ports are “predictable.” There are also disruptions which could occur from geopolitical events and natural disasters. Once you have mapped your supply chain, you will be in a better position to prepare in advance for alternatives to address these predictable surprises.

One great resource we've learned from when it comes to planning for supply chain risks is MIT Professor David Simchi-Levi who shared his ideas with us in an interview at the outset of the pandemic and wrote a great HBR article about how the war in Ukraine is disrupting supply chains last week.

Consider Asking for Help

Are you dealing with more than you can manage right now? If you're in need of advice or help, we encourage you to get in touch with us. While it can be challenging to reach out, sometimes that’s the best option.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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