Beyond the Great Disruption: The Future of Supply Chain

On a warm morning in Jackson Hole, Wyoming, at a symposium in 2005 the Chief Economist and Director of Research at the International Monetary Fund (IMF) made the following statement…

“While the techniques and instruments to absorb fluctuations have improved, there is uncertainty about how they will perform in a serious downturn.”

The speaker was Ragham Rajan and while he was widely ridiculed at the time, his speech would prove to be prophetic. The 2007-08 financial crisis to follow occurred because market changes and advancements were concentrating risk despite appearing to diversify risk.

The Great Disruption

The world is witnessing an unprecedented level of disruption beginning with COVID-19, followed by supply chain issues, and a growing disruption within the labor market. The Bureau of Labor Statistics reported the flight of workers from the hospitality industry in September, with a reported 863,000 leaving their positions, fully 6.6% of the hospitality workforce. Across the world we see acute shortages for commodities, including computer chips, furniture, and mobile devices among them. Fortunately, there are no nationwide shortages of food. Although in some cases we might have certain foods with low inventory, food production and manufacturing are widely dispersed in North America. Global Industrialization is suffering, and many manufacturers in the US are reporting a wait of more than 90 days to procure materials and assemble parts to make their products.

The Disruption Today

Beyond the supply chain shortages and bottlenecks there are multiple causes for disruption. The emerging cause can be attributed to a shortage of labor, especially truck drivers, which has stalled production operations across plants, distribution points, and delivery centers. Despite rising unemployment, the gap between labor and unfilled positions is increasing.

With global production chains divided into specialized links over many decades, different industries have become inextricably connected over a period of time. Supply shocks have spread across unlikely industries, such as automobiles and semiconductors, or food and fertilizer.

Perhaps an even more visible cause for disruption lies in oversea shipping. The port crisis in the US has received global attention over the last year due to the immense buildup of ships and the never-ending influx of cargo. What supply chain professionals initially viewed as temporary is now threatening to change global shipping infrastructures from the size of ships to business practices, which relied on speed rather than on efficiency, availability, or visibility. Container ships are now circling ports and remaining at sea for longer periods increasing costs. Sea containers cost more to ship, resulting in exorbitant prices, and the accumulation of goods at shipyards, rail yards and warehouses, a direct result of the aforementioned labor shortage, dominated by a shortage of truck drivers.

Supply Chain News

Attending a supply chain conference last week for the first time in more than 18 months, I had an opportunity to listen to several speakers. One by one each delivered his or her view of what happens next, after the great disruption.

One speaker stated simply, “Supply chain is sexy again” and that caught my attention, for starters, I would agree. Having been largely automated and then ignored, the supply chain is again making news and having work in the supply chain for many years, there is more than a passing interest from John Q. Public on Supply chain matters. The speaker went on to talk about a financial newspaper with wide distribution. The paper, the speaker continued, published a mere handful of supply chain articles each month while in recent months, that handful had exploded to several articles every day. The articles, looking more critically now, are well beyond a single new outlet and appear to have a wide array of supply chain perspectives. Reflections of the articles range in impact from the DOW to the NASDAQ and from Retail to CPG and from staples to emerging technologies and in the virtual world these articles are boundless, including this one, which brings us to the following observation.

Stress Testing the Supply Chain

The string of supply chain disruption following the pandemic has resulted in the biggest stress test for supply chain leaders the world over, retail executives in North America anticipate issues to last beyond 2022. What appeared at first to be temporary has now turned into a series of long-lasting setbacks, some perhaps resulting in a permanent state of disruption in some industries. Considering the nearly two years since the onset, when and how these disruptions will end remain a matter of conjecture. The answers are not to be found, not in anyone’s tea leaves, not yet.

The Future of Supply Chain

In order to future-proof, supply chain leaders are facing factors of change that have not been previously considered or discussed, solutions from worker migration to flexible labor practices and the movement of sourcing to new sourcing centers in emerging markets or those which can be more closely controlled or deliver an environmentally neutral position. The solution is in resolving multiple issues in the supply chain as it did way back when plastic hangers seemingly changed to black overnight.

The Solution Approach

Renewing the approach to transparency and visibility across the supply chain is critical in light of the uncertain future in this period of the Great Disruption, now clearly extended, with no end in sight. Increased transparency can better prepare stakeholders to deal with changing regulatory, environmental or compliance requirements while solving supply chain dilemmas. Visibility, through better partner communication, is becoming increasingly important to supply chain leaders that I spoke with at the conference. The importance of end-to-end communication with suppliers and partners across the trading network from their perspective cannot be overstated. Through the right technology, organizations can ensure that the appropriate information is collected, stored, and disseminated, and when partners are onboarded quickly to meet these unexpected scenarios, the results are a positive impact on business and on other concerns.

Supply Chain Advantage

The PartnerLinQ advantage is its hybrid cloud architecture and easy partner onboarding, PartnerLinQ delivers a smarter B2B/B2C Integration platform with automated End-to-End Workflows and includes business rules for omnichannel integration.

PartnerLinQ’s unique approach to supply chain can help your organization communicate with your partners rapidly, ensuring end-to-end digital connectivity across all functional areas and through a centralized visibility platform.

PartnerLinQ zeroes in on issues, tracks them, and provides detailed analysis of all of your partners, including all of their inbound and outbound transactions and can generate alerts for specific partner events, delivering the insight your users need to address supply chain issues immediately.

Scan2EDI converts your manual process into electronic transactions using robotic process automation, optical character recognition, document management software, business process outsourcing, and artificial intelligence. Scan2EDI offers application integration advantages including PartnerLinQ’s ERP Integration Framework.

Instant Ocean Visibility provides container status at your fingertips. Integrated, automated, and reliable, your port – your container, Instant Ocean Visibility removes human intervention from container tracking, eliminates endless web searches, eliminates phone calls & email and eliminates voice messages and call backs.

Take control of your supply chain in the present and forge a new one for the future with PartnerLinQ. Talk with our experts to learn more.