Clogging shipping lanes, component delays and empty store shelves were the dominant stories of 2021, forcing industry leaders to rethink how they handle supply chains.
Outlook 2022: Overcoming Supply Chain Bottlenecks
Editor’s note: Given the remarkable changes in the industrial world during our two years of COVID-19, IndustryWeek’s editors asked contributors and business leaders to share how their outlooks have been changed by the ongoing challenges. The following is a collection of short answers gathered by Executive Editor Jill Jusko, Senior Editor Laura Putre and Senior Editor Adrienne Selko.
It started with shortages of computer chips forcing automakers to temporarily shutter facilities. Then, lumber prices grew exponentially. And at some point in 2021, it’s likely that everyone in the world had to wait longer for a finished product than they would have wanted because global supply chains had been so overtaxed.
So, when we asked people how the past few years have changed their outlooks, many responses focused on the need to rethink the supply chain. With manufacturing experts saying these challenges could persist throughout 2022, many are encouraging long-term planning that focuses on localization of supplies and flexibility in operations.
Control What You Can
From port shutdowns to congestion and sky-high rates, unprecedented supply chain disruptions were top of mind in 2021. For me, it was the year of the logistics professional. When systems and processes couldn’t cope, creative and agile supply chain leaders collaborated to overcome bottlenecks. We controlled what we could and faced reality for everything else. As we approach 2022 and prepare for another year of COVID challenges, I’m grateful for my colleagues and professional contacts who make the global supply chain work.
Plan Globally, Source Locally
It is pretty clear that corporate executives should be reviewing how their current supply management strategies and practices have led to the current—and what I expect to be on-going—supply chain disruptions. And, I suspect one conclusion they’ll come to is that the greater the length of a supply chain, the higher the risk of supply chain disruption. Going forward, sourcing with distant suppliers may become the exception rather than the rule it is today. —IndustryWeek adviser, Supply Chain Initiative
There is No New Normal
Everything is turned upside down. Last year demand was low and supply chains were empty. Now the reverse is true. Guess what? Either situation is a business killer if you do not stay on top of it.
Forget about the so-called “new normal.” There is no new normal. There is only what is happening right now. And what is happening right now is nothing you have ever seen before. And what happens tomorrow will be nothing like you have ever seen before either. The norms of business ebbs and flows are out the window. Do not rely on them. Do not overreact when your normally high sales season does not appear. Do not celebrate when it comes at a later or earlier time.
In other words, stay flexible and stay in tune with where the business is heading today. Remember, that may not be where it is heading tomorrow. — Miller Ingenuity CEO, author of Metamorphosis: From Rust-Belt to High-Tech in a 21st Century World
Confirming Best Practices
My views haven’t been changed by the pandemic so much as they’ve been confirmed. I always felt that U.S. manufacturers were making a serious mistake in moving work overseas and switching to offshore suppliers just to save a bit on labor costs. Just as we saw, long supply chains are vulnerable to disruption by external shocks. Happily, many companies, having seen the impact of that error, are onshoring their own work and their purchases.
I’ve long advocated for agility, rather than low cost, as a core competency for manufacturers. Agility is founded on both capable processes and a strong culture of teamwork and collaboration, high-involvement problem-solving and bottom-up decision-making. We saw the value of corporate agility in the rapid development and distribution of a number of effective vaccines and, recently, medicines against COVID-19.
Finally, the difficulty that manufacturers are having in getting candidates to fill open positions, even as enhanced unemployment benefits ended, reinforces my position that a strong, positive culture of respect for employees provides a strategic advantage. Companies like Tendon Manufacturing, a metal fabricator and manufacturer here in NE Ohio, have always understood this.These companies aren’t having much trouble retaining good employees or finding new ones when the need arises.
NEOLink cooperated with our order processing system. He did not replace it or force solutions. Logfret did it better than other companies on the market – it adapted its system to ours. Logfret didn’t come to us saying, “We have this solution, and you either use it or we won’t cooperate.
We made a huge improvement in global visibility with a global platform—anyone can log into NEOLink and look at a shipment anytime, anywhere in the world. We wanted a freight forwarder with a good technology platform, which could handle the complexities of our business and we found NEOLink!
My suppliers have less or zero experience with international logistics. Thus, not able to create proper documentation which leads to tremendous delay. Thanks to Logfret who provide training to all suppliers and work with us to build up a consolidation hub to reduce transportation costs significantly.