With peak season almost over, the sky hasn’t fallen. The opposite is true. Sure, disruptions stressed the global supply chain without a break. But it’s withstanding the pressures during one of the most challenging seasons.
That bodes well for a return to normalcy sooner rather than later.
Michael A. Levans, Group Editorial Director, Logistics Management, stated that “… supply chains are emerging stronger, smarter, faster.” That was his observation in LM’s October 2021 issue.
That opinion seems to be holding up. Granted, cargo is moving slowly, and congestion still prevails. Other problems persist, but their impact is waning. That suggests we may be in the early stages of improvement or are we?
The verdict on the effects of the Omicron variant is still undetermined. It is unlikely lockdowns, as experienced in the first round of Covid-19, will reoccur. Lesson learned will ensure governments keep economies open as much as possible. Looking back at the reaction to Covid-19 two years ago, the consensus is that the response was excessive.
Notwithstanding the bumps in the road ahead, the return to normalcy is underway, and it’s not accidental. Instead, it comes from stakeholders working together to combat the barrage of disruptions.
Overwhelm led to joint efforts that are now leading to multiple solutions. Those solutions will release supply chains from the pandemic’s grip. That signals an exponential growth of benefits. As Mr. Leavens puts it, that should lead to stronger, better, and faster supply chains.
This blog post probes what supports this outlook, while featuring changes you can expect as businesses emerge from crisis operations.
Supply Chain Challenges Aplenty
Before getting into how and why supply chains are on the road to normalcy, let’s look at the issues disrupting supply chains.
· Worldwide port congestion
· Worldwide container shortages
· Persistent labor shortages across supply chains
· Non-integrated, stove-piped legacy systems
· Lack of diversified sourcing
· Lack of E2E visibility
· Lack of cybersecurity
This list includes those issues and disruptors businesses can control or manage. Some of these may seem too hard to solve, but they aren’t insurmountable. But this is only a partial list. There are other disruptors over which business have little or no control.
Some of those are increasing consumer expectations, rising and uncontrollable shipping costs, and extreme weather.
You also have disruptive technologies, decaying infrastructure, government regulation, disjointed global trade, and, of course, pandemics.
How Technology is Boosting A Return to Normalcy Leading to Stronger, Smarter, Faster Supply Chains
As Covid-19 hit, disruptions occurred all along the supply chain. The pandemic left nothing unscathed. That hastened the drive to seek solutions from technology. It expedited technological development by 3 – 10 years, according to some estimates.
Adopting new technologies had several beneficial effects. First, they offered quick solutions to pressing problems. Their application focused on the easy-to-fix issues. But that also led to addressing persistent issues that had plagued supply chains before the pandemic.
That created a cycle of hyper-innovation and development. That contributed to an ongoing cycle of innovation and change leading to new solutions.
Some of these newly-adopted solutions replaced lower-skilled labor jobs. That helped to keep the labor shortage from worsening. Meanwhile, new technology adoption led to new, higher-skilled jobs. We saw a rise in demand for data scientists, cyber security specialists, and data analytics specialists. In addition, new solutions improved productivity and reduced cycle times.
Challenges continued unabated, spurring demand for quick solutions enabled by technology. Yet, the most vital driver in the return to normalcy may be cooperation and collaboration.
Defeating Disruption with Cooperation and Collaboration
Technology has been credited for making great headway in stabilizing supply chains. But another powerful capability is cooperation and collaboration. You cannot overemphasize the value of this low-tech solution.
The supply chain disruptions over the past 11 months have been relentless. But they also gave rise to increased collaboration. Working together became a coping mechanism. As businesses realized the power of cooperation and collaboration, many formed partnerships.
Partnerships led to closer collaboration that improved information flows. That helped businesses endure disruptions more easily. Examples of partnerships included government and private industry, 3PLs and shippers, and port authorities and truckers. Expect partnerships to rise between shippers and 3PLs. Port authorities and truckers will also see a need to cooperate more closely.
When you combat supply chain disruptions by yourself that puts you at a disadvantage. Partnering can bring more resources and a clear focus to bear on a problem.
Light at the End of the Tunnel: Returning to Normalcy
These are challenging, yet exciting times. Supply chain issues have made headline news like never before because of the constant barrage of disruptions. These disruptions, meanwhile, triggered a rapid response from government and industry alike.
That response has accelerated the rise of technical solutions and partnerships. Call it a survival instinct. The need for self-preservation sparked the need to address problems differently. New circumstances demanded fresh approaches and new solutions.
Industry stakeholders have risen to the challenges. They responded tactically with immediate solutions to address urgent needs. More importantly, stakeholders also addressed persistent issues strategically. Together, these responses influenced future supply chain operations.
In the short-term, many challenges still promise to disrupt supply chains. In the long-term, supply chains will emerge more agile and more resilient.
At American Global Logistics, we know the supply chain challenges you face. To overcome them, your supply chain must be agile and resilient. We work in partnership with our clients to achieve agility and resilience.
Contact us to learn more about how we can help you get through today’s disruptions. When you partner with us, you’ll not only survive, you’ll also thrive and profit.