3 Reasons to Pay Attention to Shortages
From lumber and semi-conductors to ketchup and swimming pool supplies, the global supply chain has recently been riddled with shortages.
These shortages have been catching the attention of the mainstream media and creating headlines. But how do you cut through the clickbait and read between the lines? What does it mean for you and your business?
As the economy reopens and consumer spending shifts from goods to services, these surges and consequent shortages can have a ripple effect across all industries. Here’s what to look out for.
- Watch for bottlenecks – even those outside of your industry. Delivery delays and manufacturing surges strain supply chains. When restaurants recently struggled with a ketchup shortage, even non-food service industries could feel the effects. Ports can become jammed, rail hubs get congested, trucks become less available. Planning around these strains is essential. Specialized expertise, proactivity, creative solutions and access to a variety of modes and services can help your business navigate bottlenecks.
- Inventory gaps may be exposed. This year's supply chain strain is uncovering many inventory weaknesses but one recent example is from the coffee industry. Many global coffee roasters were faced with lean inventories after the Suez Canal crisis. The canal blockage exposed inventory weaknesses for many roasters. They did not have the buffer stock to last the anticipated delays of two to three weeks. To achieve resiliency in your supply chain, shippers in all industries should consider adding some “just in case” stock to their own inventories, moving away from aggressively lean systems with little to no buffer inventory.
- Pay attention to your suppliers’ suppliers. If a shortage happens in your industry, you’ll be battling with your competitors to be first in line for supplies. Get ahead of the issue and start communicating with your suppliers as well as your suppliers’ suppliers. Insight into disruptions and slowdowns can make a world of difference.
Recent headlines have shown us repeatedly how complex the global supply chain is. But there are lessons to be learned. Planning and building resiliencies now can give shippers the competitive edge to diminish risk and succeed.