Here’s Why Supply Chains Are So Broken—And Aren’t Really Getting Better – Forbes

December 24, 2021 by No Comments

FILE – A truck arrives to pick up a shipping container near vessels moored at Maersk APM Terminals … [+] Pacific at the Port of Los Angeles, on Nov. 30, 2021. The Port of Los Angeles is on track to move a record volume of import cargo this year. Officials at the nation’s busiest port expect to hit the new mark, even as they struggle to clear a backup of ship traffic and ease supply chain snarls that have been blamed for product shortages and higher shelf prices. (AP Photo/Damian Dovarganes, File)

ASSOCIATED PRESS

By Erik Sherman

If you’re in business, any of these may sound familiar at this point. You can’t get large plastic cups for iced drinks. Building supplies. Pet food. Car parts. Cars. And lord knows what else. The supply chain blues.

GMH Communities, which builds and operates student housing and hears that if it needs appliances for 400 units, that could take six to eight months. “It’s a nightmare,” GMH president Gary Holloway says of the shortages. “It was everything from appliances to steel to more.”

“Companies are saying, ‘My product is being stopped, not because of some critical thing, but because of a plastic holding device for a custom box on an automated line I have,’” says Ethan Karp, CEO and president of MAGNET, a manufacturing advocacy and growth network in northeast Ohio. “I designed my line to work with this piece. It will take time to find another vendor, to get the molds made.”

Even as things supposedly are easing up, the improvement is in the symptoms. Three classes of causes remain to rise up at the next disruptive trigger, because Covid-19 was a trigger, not an absolute cause.

Poorly executed supply chain management

Many have pointed to back-ups at jammed ports, a lack of truck drivers, labor shortages, Covid-19, and the saying that “it’s a lot easier to go from 60 to 0 miles per hour than from 0 to 60.” All of which may be true.

But there’s a bigger cloud over supply chains and logistics. For decades, such strategies as lean and just-in-time supply chains have been popular, reducing the amount of on-hand and in-transit inventory through greater efficiency in production and distribution, freeing up money to invest in other areas of a business.

WASHINGTON, DC – DECEMBER 22: U.S. President Joe Biden speaks during a meeting with his … [+] administration’s Supply Chain Disruptions Task Force and private sector CEOs in the South Court Auditorium of the White House December 22, 2021 in Washington, DC. Biden spoke on measures the White House is using to mitigate supply chain bottlenecks, incentivizing new truck driver hirings and expanding domestic production. (Photo by Drew Angerer/Getty Images)

Getty Images

At the same time, experts in logistics have warned that there are good and bad ways of using these tools. Too many corporations take the latter approach.

“Just in time inventory works really, really well if you believe [your] Tier-1, Tier-2 suppliers are ironclad,” says Aaron Alpeter, founder and principal of supply chain and operations firm Izba Consulting. To ensure that they are working as they should, a business needs to monitor their supply chain. “You don’t have to wait until something bad happens. You should …….

Source: https://www.forbes.com/sites/zengernews/2021/12/24/heres-why-supply-chains-are-so-broken-and-arent-really-getting-better/

Tags:

Leave a Comment

Your email address will not be published. Required fields are marked *