When supply chains run smoothly, the economies they support do too.

But when even the smallest disruption occurs, supply chains can quickly turn into the equivalent of a daisy chain — where one event sets off a cascading impact down the entire logistics value chain.

Experts fear that this is what could happen up and down the East Coast as businesses and shippers try to manage the fallout from the March 26 collapse of Baltimore’s Francis Scott Key Bridge as a result of a cargo ship collision.

“The impacts to the local region will be significant for several months or years until the bridge is rebuilt,” Lisa Anderson, founder and president of LMA Consulting Group, told PYMNTS in an interview. “Even once the port is reopened, trucks will continue to be re-routed around Baltimore, adding time and cost to trips from the port and through the Baltimore area.”

The Port of Baltimore itself remains closed to ships moving in or out until further notice, and officials are now faced with the task of removing the thousands of tons of steel and concrete clogging Maryland’s Patapsco River, while at the same time navigating the logistics of rerouting Baltimore-bound ships to other ports up and down the eastern seaboard.

The U.S. Coast Guard opened a temporary alternate channel Monday (April 1) for vessels that are helping with the cleanup effort.

“The most critical timeframe is clearing the bay to reopen the port, which could take weeks,” Anderson said. “This will impact the ninth biggest port in the U.S. and 3,200 sites involved in logistics, distribution and warehousing nearby the port and bridge as well as local businesses.”

Read more at PYMNTS site.

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The collapse of the Francis Scott Key Bridge and the closure of the Port of Baltimore this week could have far-reaching implications all the way across the country for the ports of Los Angeles and Long Beach, according to several experts.

The bridge collapsed Tuesday about 1:30 a.m. when the Dali, a 985-foot-long cargo ship en route to Sri Lanka, crashed into one of the bridge’s support pillars shortly after losing power. It sent a majority of the bridge plummeting into the 50-foot-deep Patapsco River below, claiming the lives of at least two construction crew workers on the bridge; four others are missing and presumed dead.

In the short term, the closure of the Baltimore port will increase costs for businesses and consumers on the East Coast, said Lisa Anderson, founder of LMA Consulting Group, which specializes in supply chains and manufacturing. That’s because the container ships on their way to Baltimore will be diverted to nearby New Jersey, Pennsylvania and Virginia ports, and the products they’re carrying will have to change the arrangements previously made to be transported to wherever they need to go, Anderson said.

The closure will also affect warehouses and other logistics services, which will have to decide whether they want to switch to other facilities while officials work on reconstructing the bridge and reopening the port, Anderson said. Trucks will also have to be diverted from the Key bridge, meaning they’ll either have to go around the city or pass through tunnels, which have height, width and hazardous materials restrictions.

Longer term, ports in Los Angeles and Long Beach could see more activity, especially with drought conditions reducing the capacity of the Panama Canal, Anderson said. The shipping route from northeast Asia through the Suez Canal and to the East Coast of the U.S. has also become perilous because of the war in Gaza. The Iran-backed Houthis in Yemen have been attacking commercial ships going through the Suez Canal, resulting in shipping lines having to divert their vessels around the southern tip of Africa.

What that means is that the ports of Los Angeles and Long Beach will see an increase of volume, translating to more activity for trucking companies as well as for warehousing and rail systems, Anderson said.

“That’s a positive, but we also need to make sure it’s not gonna become a new bottleneck,” she said. “These folks are adding time to their orders so they have to find new routes and we wanna make sure we’re prepared to service this additional volume.”

The closure of the Baltimore port could also lead to a “nominal” uptick in costs for the products that typically arrive there, such as cars and light trucks, Anderson said. The costs of diverted transportation will eventually be passed on to customers, but it’s not expected to be significant across the U.S., she said.

Read more at the LA Times

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The Francis Scott Key Bridge, once the second-longest continuous truss bridge in the U.S., now lies partially submerged in the Patapsco River after a catastrophic cargo ship collision this week.

“Will this Baltimore situation add a bunch of cost to the global supply chain? Well, no,” said Lisa Anderson, president of LMA Consulting Group. But with additional global complications, costs could compound.

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The Francis Scott Key Bridge, once the second-longest continuous truss bridge in the U.S., now lies partially submerged in the Patapsco River after a catastrophic cargo ship collision this week.

Two people were injured, and six others presumed dead. The ship and mangled debris from the bridge have formed a wall in the water, indefinitely blocking access in and out of the Port of Baltimore, the top domestic port for cars and a major hub for other goods, such as forest products, farm equipment and sugar.

Among the questions around what happens now is what the accident means for shipping and the economy.

The port handled a record amount of cargo last year. While President Joe Biden has said he intends for the federal government to rebuild the bridge, and called on Congress to support that effort, the port is directly responsible for about 15,000 jobs and generated $4.7 billion in economic value to the state of Maryland.

The bridge’s collapse stranded at least 10 vessels in the water and ships outside the blockage have had to reroute to other East Coast ports, such as Norfolk and New Jersey. For global shipping, this comes at a time when companies are contending with route disruptions along the Suez and Panama canals.

Here’s how the Key Bridge collapse may affect the port’s operation, the local economy and international supply chains.

• What role does the Port of Baltimore play?
• How long will shipping be suspended?
• Will supply chains be interrupted?
• What are potential long-term effects?
• What about local and regional effects?

Read more at PBS News Hour site.

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CLAREMONT, CALIFORNIA – March 28, 2024 –  In the aftermath of the catastrophic collapse of the Francis Scott Key Bridge, Lisa Anderson, MBA, CSCP, CLTD, President of LMA Consulting Group Inc., emphasizes the profound and wide-ranging impacts on global supply chains.  The bridge’s destruction not only disrupts local traffic and logistics but also sends shockwaves through international trade routes, highlighting the critical need for robust supply chain resilience strategies.

The incident, which tragically claimed lives and caused significant infrastructural damage, poses immediate challenges to the Baltimore port – the 5th largest container port on the U.S. East Coast. With the port effectively cut off, the repercussions extend far beyond the immediate delays and diversions. “This disaster underscores the interconnected nature of global supply chains and the cascading effects a single disruption can have,” Ms. Anderson notes. “It’s a stark reminder of why companies must prioritize flexibility, diversification and contingency planning.”

In response to the bridge collapse, Anderson advocates for the adoption of nearshoring, reshoring, friendly shoring and regional manufacturing strategies. These approaches not only mitigate risks but also enhance supply chain responsiveness and sustainability. “The current crisis highlights the vulnerabilities in our supply chains and the pressing need for strategic adjustments,” she states.

Drawing from her extensive experience in supply chain optimization, Anderson calls for a proactive stance with processes like Sales Inventory Operations Planning (SIOP) and the development of multiple backup plans. Her insights are informed by the broader context of recent disruptions, including drought conditions in the Panama Canal and geopolitical tensions affecting the Suez Canal. “In today’s volatile environment, a single backup is insufficient. Businesses must think several steps ahead to navigate and thrive amidst uncertainties,” Anderson asserts.

LMA Consulting remains at the forefront of guiding businesses through supply chain challenges, offering strategic insights and tools such as the Supply Chain Profitability Assessment. This tool encourages organizations to critically evaluate their supply chain operations, fostering agility and strategic foresight.

LMA Consulting specializes in guiding businesses through turbulent times with strategic formulation, comprehensive supply chain transformation and resilience-building solutions. For more insights, download Ms. Anderson’s eBook, SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth.

About LMA Consulting Group – Lisa Anderson, MBA, CSCP, CLTD

Lisa Anderson is the founder and president of LMA Consulting Group, Inc., specializing in manufacturing strategy and end-to-end supply chain transformation.  A recognized supply chain thought leader, Ms. Anderson has been named a Top 40 B2B Tech Influencer by arketi group, a Top 16 ERP Expert to Follow by Washington-Frank, among the Top 10 Women in Supply Chain by Warner PR, in the top 55 Supply Chain & Logistics Experts by flexport, and a woman leader in Supply Chain by RateLinx.  Her primer, “I’ve Been Thinking.” offers strategies for creating bold customer promises and profits. An expert on the SIOP process, advancing innovation and enhancing supply chain resilience, Ms. Anderson is regularly interviewed and quoted by leading publications. For information, sign up for her Profit Through People® Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.                 

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Media Contact Kathleen McEntee | Kathleen McEntee & Associates, Ltd. | p. (760) 262 – 4080 | KMcEntee@KMcEnteeAssoc.com

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Given the succession of unforeseen events in recent years, from the blockage of the Suez Canal by the Ever Given ship to the supply crisis during the pandemic, Lisa Anderson, president of supply chain consultancy LMA Consulting Group, believes that companies must be more proactive and take the initiative instead of simply reacting when something happens and it’s too late. “That means establishing alliances and regional supply sources, better planning inventories and being at the forefront of technological advances.”

Lisa Anderson was quoted in EL PAÍS.

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This is how companies deal with the Red Sea crisis: planes, storage, and closest suppliers

The impact on inflation still seems limited, and major stock outages are not expected, but experts and those affected agree that the key will be the duration of the conflict.

The rain of drones loaded with explosives and Houthi missiles on merchant ships in the Red Sea has turned the once boring and reliable maritime industry into a focus of uncertainty and negative surprises , with unexpected delays due to route changes, cost overruns due to the increase in the cost of freight, and sky-high insurance against the possibility that the cargo never reaches its destination. It is exactly the opposite of what companies intend in this way, which place their orders months in advance so that they can be delivered on time by heavy container ships, slower but cheaper and with more cargo capacity than airplanes.

As the crisis becomes more chronic, the list of those affected continues to grow. The sources consulted point out that despite the magnitude of the detour of the ships, forced to avoid the Suez Canal and make a detour around the Cape of Good Hope that implies at least nine more days of travel, the impact is not yet dramatic or for global economic growth or inflation. “The first estimates suggest for now that the impact of the Red Sea crisis on inflation will be moderate, with an additional rise of a few tenths this year and an impact mainly focused on imported goods,” explains Ángel Talavera, chief economist for Europe at Oxford Economics. The Bank of Spain also lowers the volume of the shock: it believes that fragile global demand and the absence of congestion in the logistics industry will prevent the traffic jams of yesteryear.

The key word, however, is that still : if the US and EU military missions do not achieve their objective of returning security to the area, the consequences could be very costly. At the moment, they already involve uncomfortable surcharges and hasty adaptations. This is the case of automobile companies, with a supply chain based on the just-in-time model , and less accustomed to storage. “Some automotive suppliers installed in Spain are being affected by delays in the components or raw materials necessary to manufacture them, as well as an increase in costs by having to resort to air transport instead,” the employers say Sernauto.

The crisis cabinets have not stopped meeting to minimize the blow. “Being a tremendously flexible and resilient industry, they are already adopting measures such as increasing stocks , readjusting transit times, advancing orders to suppliers and contingency plans,” adds Sernauto. Companies such as Tesla, Volvo and Michelin have already announced temporary stoppages in some of their production plants in Europe due to not having the materials they need on time. This will translate into thousands of fewer cars manufactured, between 5,000 and 7,000 in the case of Tesla and the pause of one of its factories in Germany.

“Non-urgent orders are being postponed, the key variable is the duration,” say sources from the business association CEOE. Talavera agrees. “The precedent of 2021-22 tells us that there are risks of an exponentially higher impact if the crisis is sustained over time and the blockade begins to create disruptions in supply chains. “Europe imports liquefied gas from Qatar, which crosses through the Suez Canal, and a significant part of oil traffic could also be affected.”

More expensive freight and insurance

The large consumer association Aecoc warns that the impact is already significant in sectors such as food, textiles and fashion, hardware and DIY or technological consumer goods, with freight rates that in some cases have become “300%” more expensive. which adds to the higher premiums requested by insurers, who sometimes even refuse to cover the risk of shipments.

Even so, the employers assure that for now there will be no shortage of stocks , that is, that shortages will be avoided. “In recent weeks, companies have focused their efforts on anticipating purchases of raw materials, looking for new suppliers in closer geographic areas and managing their supply through new routes and other means of transportation as an alternative to maritime transportation,” they point out.

From the Spanish Federation of Food and Beverage Industries (FIAB), they detect that warnings are growing for companies that import to increase their safety stock due to expected delays, and they perceive that the merchandise in warehouse is expanding due to the greater transit times. As more time is spent at sea and less available, the difficulties in obtaining space also increase, despite the fact that the number of new boats sailing has grown in recent months. “The direct impact is on the routes with Asia and the Middle East, but there is also an indirect impact on the route between Europe and America due to the shortage of containers and ships,” FIAB sources say.

The perfect storm is completed by the celebration of the Chinese New Year in February, a period that historically involves a slowdown in production, limited transportation operations and supply chain disruptions. And with the problems in another key artery, the Panama Canal, which has limited the passage of ships due to a severe drought. “Container ships are also diverting to the ports of Los Angeles and Long Beach, and transporting those shipments across the US to the East Coast. Air freight is increasing for urgent shipments and manufacturers are experiencing delays,” explains Lisa Anderson, president of supply chain consultancy LMA Consulting Group.

Given the succession of unforeseen events in recent years, from the blockage of the Suez Canal by the Ever Given ship to the supply crisis during the pandemic, Anderson believes that companies must be more proactive and take the initiative instead of simply reacting when something happens and it’s too late. “That means establishing alliances and regional supply sources, better planning inventories and being at the forefront of technological advances.”

Minor impact to the pandemic

The investment manager Federated Hermes expects that the economic impact of the interruptions will be accentuated in the first two months of the year because cheaper trips contracted before the attacks in Israel are replaced by current ones at higher rates. In context, the cost overruns are even lower than those of the supply crisis closest in time. “The recent increases in container shipping rates are significant, but do not come close to the sharp increases in 2020 and 2021 during the covid-19 pandemic.”

Then, as now, shipping companies were the big beneficiaries , multiplying their income and reaping increases in profits accompanied by strong increases in the stock market. On the losing side of the Red Sea crisis, the insurer Crédito y Caución places European manufacturers in first place. “They import a wide range of intermediate goods from Asia-Pacific, such as electrical equipment, high-tech goods, rubber and plastics, chemicals and machinery. If the crisis continues, waiting times, prices and congestion at ports are likely to increase. This may accelerate the return to a greater willingness to maintain higher inventory levels out of an abundance of caution,” they note.

See the original article here.

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Lisa Anderson, a supply chain expert and president of California-based LMA Consulting Group, says that in the past, shippers, vessel operators and manufacturers may have waited too long to properly evaluate an emerging threat such as COVID-19 or the Houthis, when taking action sooner would have been prudent.

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As Houthi attacks on ships escalate, experts look to COVID supply chain lessons

An upsurge in attacks on commercial ships by Iranian-backed Houthi rebels in the Red Sea threatens to disrupt the global supply chain as vessels are forced to reroute around Africa to avoid the conflict zone. Normally, about 15% of the world’s trade passes through the Red Sea, and delays and escalating insurance costs are hitting industries such as petroleum, food and electronics.

Manufacturers have already experienced some problems in getting parts to assembly floors, and both Tesla and Volvo last week blamed the Red Sea troubles for delays at plants in Europe.

But shipping industry experts hope lessons learned during the COVID-19 pandemic, the Suez Canal disruption in 2021 and Somali pirate attacks more than a decade ago will help mitigate widespread problems this time, should the conflict widen in the Red Sea.

Since October, the Houthis have targeted several ships on the Red Sea with ballistic missiles and drones and have hijacked others near the entrance to the vital corridor at the Bab-el-Mandeb strait. The Houthis have said their attacks are in response to Israel’s air and ground assault on Gaza, which has killed nearly 25,000 Palestinians, according to Gaza’s Health Ministry. The military campaign in Gaza followed the Oct. 7 attack by Hamas that Israel says killed 1,200 people.

The U.S., leading a maritime coalition involving more than 20 countries, according to the Defense Department, has launched airstrikes against the Houthis to secure the waterway.

Supply chain disruptions are nothing new for the shipping industry. The COVID-19 pandemic presented an unprecedented challenge for the industry — with vessels stuck at ports waiting to load goods even as freight rates skyrocketed from a lack of capacity and quarantined consumers ordered everything online. Also in the Red Sea, the giant Ever Given container vessel became lodged in the Suez Canal in 2021, halting all traffic through that vital area for nearly a week. And more than a decade ago, Somali piracy was a major concern for shippers as well.

Read more at NPR here.

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The best consulting clients are razor focused on supply chain volatility, risk and capacity. The recent events in the Red Sea highlight these critical priorities. As Houthi drone and missile attacks create chaos in the Red Sea, shipping container lines play it day by day as to whether to brave an attack or sail around the southern tip of Africa. If they reroute, it adds approximately 10 days and 1900 nautical miles onto a typical Asia-North Europe service. Additionally, some ships go through the Suez Canal for the East Coast of the U.S. This route has increased with the recent reduced capacity of the Panama Canal. Read our recent article, Supply Chain Optimization Remains a Priority as the Panama Canal Worsens on those issues.

High Risk in the Red Sea

What started with an Iran-backed Houthi attack on container shipping lines sympathetic to Israel has blossomed into a volatile, risk-laden decision to sail through the Suez Canal. For example, there was an attack on an MSC ship sailing from Saudi Arabia to Pakistan. According to Freightos CEO, approximately 50% of ships have been diverted from the Suez Canal, reducing capacity (due to extended lead sailing time) and increasing rates by around 30%. Safety is top priority, and CEOs are evaluating risk on a daily basis.

Alternate Routes & Sources of Supply

Clients are starting to ship to the L.A. and Long Beach ports to transport across the country to the East Coast; however, this change cannot happen rapidly, and adds time and cost to shipments. For quicker needs, companies are sending product by air freight to quickly respond to changing customer needs. Certainly, air freight is more expensive, thus inflating prices further. More and more companies are realizing they must reshore, nearshore, and take control of their ability to serve customers. Some are finding backup sources of supply while others are expanding their manufacturing footprint. The bottom line is supply chains are on the move.

Mexico Border Closures Impact Intermodal Trains

According to the Journal of Commerce, a major intermodal rail connection between Mexico and the United States was halted after US authorities shut down border crossings at Eagle Pass and El Paso in Texas so customs officers could help US Border Patrol process a flood of migrants. The two major class 1 railroads, Union Pacific Railroad (UP) and BNSF Railway, were impacted. Unfortunately, this is the second time in three months the Eagle Pass Crossing was shut down due to a surge in migrant arrivals. Intermodal has opened up again; however, UP and BNSF have a logjam of laden containers built up that need to be transported to the US.

Again, customers waiting on this freight experienced delays and reduced capacity. It is clear that risk and volatility remains high throughout the world with goods movement.

Forward-Thinking Companies Thrive

Smart executives are thinking ahead, planning capacity and backup capacity with a SIOP (Sales Inventory Operations Planning) process and successfully navigating these ongoing disruptions. Forward-thinking companies are gaining an advantage as they have planned ahead to be agile, pivot quickly, and most importantly, are ahead of the curve in securing capacity. For example, a proactive client moved production from China to Vietnam ahead of the pandemic when China shut down production with Zero-COVID policies. Again, they are ahead of the curve by expanding capacity in Mexico and the U.S. to ensure sufficient capacity to supply key customers. While the competition struggles, they can provide rapid deliveries with increased prices and gain long-term customers.

The key is to proactively address these issues to mitigate the impacts to the customer and cost, and longer term, to revise your manufacturing and supply chain footprint and network to best support profitable growth and mitigate risk.

If you are interested in reading more on this topic:
Supply Chain Risk Has Risen to the Top with the White House Council

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A UPS strike was averted on the last day of the quarter, but it still hangs in the balance as the two sides are not on the same page! A potential UPS strike could have significant negative impacts on the supply chain and customer service. The head of the union said an imminent strike was likely when a counterproposal fell flat. Now that a new counterproposal was submitted, the imminent strike was called off with a new date set within a wee

The West Coast ports have been negotiating with the unions for months with no agreement in place. Recently they came to a tentative agreement after rising tensions resulting in delays in vessel servicing, congestion at the ports etc. A widespread strike along the West Coast could cost $1 billion a day! This agreement will take months to ratify. Unfortunately, details are scarce as to what is in the agreement and how that will impact competitiveness of the ports.

The threat of a port strike in Canada remains high. They voted in a landslide to authorize a strike. Vancouver and Price Rupert ports were seen as relief valves for shippers during the West Coast negotiations. Trade issues have been exacerbated since the Panama Canal has struggled due to low water levels which limits the weight of vessels in the canal.

This follows the rail strike that was averted at the last minute by Congress. A rail strike could result in $2 billion a day in lost economic output.

A UPS Strike’s Supply Chain Impacts 

Clearly, the economic impact is substantial at $1 billion a day for UPS! This doesn’t even tackle the hoards of supply chain issues caused by strikes of the transportation / goods movement systems. A few of the HUGE impacts include:

• Lack of deliveries of raw materials, components & supplies: This can bring production to a halt. Best case, schedules are changed, materials are expedited and supply chain chaos follows.
• Shipments delayed: In today’s complex supply chain, if one node stops or slows down, the entire end-to-end supply chain is impacted. For example, there can be several manufacturers, suppliers, distributors, transportation partners, and customers negatively impacted and scrambling.
• Customer & consumers negatively impacted: Delays throughout the system similar to the pandemic could result.
• Critical supplies impacted: Beyond nice-to-have purchases, supplies impacting healthcare, national security and food will be impacted.

Listen to my interview on FOX5 about the potential UPS strike.

What to Do?

The answer is not to rely on hope!

Instead, you should follow a few uncommon common sense best practices to mitigate the supply chain impacts:

• Backup partners: Ensure you have backup suppliers/ transportation partners. Remember, you cannot have a backup supplier in name only. To be successful, you must be working with your backup suppliers on a continual basis and giving them at least 20% of your volume.
• Backup modes of transportation: Instead of air freight, you should be reviewing backup modes of transportation. This won’t make sense for piece shipping (e-commerce) although you should explore and be aware of your options.
• Reevaluate your supply chain network: It is time to take a fresh look at your complete supply chain network, simply due to the exacerbated risk factors in the global supply chain. Make short term tweaks and build a resilient supply chain for your long-term competitive success. There are countless ways you can mitigate these types of risks while creating a resilient network.
• Be a partner of choice: Simply looking at price will no longer cut it. It never did but companies were able to get by. You must find collaborative win-win relationships to succeed in the modern supply chain.

Please contact us with stories, issues, and opportunities on what you’re doing to free up the mind and create a culture of innovation. And, please keep us in the loop of your situation and how we can help your organization get in a position to thrive for years to come. Learn more about these topics in our blog and download your complimentary copy of our recently released special report: The Road Ahead: Business, Supply Chain & The World Order.

Do you like this article? Keep reading on this topic.                                                                                                                                Rail strike could bring immediate impacts to some industries, supply chain consultant says

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Lost Volume at the West Coast Ports

According to PMSA (Pacific Merchant Shipping Association), the five big West Coast ports have lost volume – 702,083 fewer loads and empties were handled in January and February 2023 than in the same period pre-pandemic in 2019. This equates to close to a 16% reduction. Specifically, the Port of Long Beach was off by 18.7% from January 2019 which was the lowest volume of inbound loads since January 2012 (except for 2015 when labor disputes created issues). The inbound volume is even worse at 20.6% at the San Pedro Bay port complex. These are significant differences, and successful clients are paying attention. Instead of responding, these clients are creating these changes.

Volume Is On the Move Eastward

PMSA reported that the East Coast ports grew business by 5.6% since 2019, surpassing the West Coast ports volume. The Gulf Coast ports started from a small base but grew by 49.1% since 2019. Clearly, volume is on the move eastward.

What Has Caused the Move?

The smart are reconfiguring their supply chain to succeed in the year’s to come. Specifically, we see smart executives moving volume for the following reasons:

• Threat of port strike / labor disputes: Executives are worried about the potential for a strike and/or other negative impacts from labor disputes. According to the Wall Street Journal, labor tensions are increasing in stalled talks at the West Coast ports. There are several issues being negotiated, and the two parties still seem to be far apart. For example, automation is a major issue in labor negotiations. On the other hand, US ports rate low for automation overall. According to APM Research Lab, the US ports are the lowest ranked ports in total port hours per ship call whereas Saudi Arabia and China are in the highest ranked group.
• Service failures during the pandemic: Executives remember the agonizing service issues and delays they experienced during the pandemic, and they are taking control of their customer experience. Some are re-routing goods through the Panama Canal to the East Coast ports, others are shipping via air, etc.
• Inventory gluts: Purchasing groups panicked when service failures, delays and shortages were commonplace, and overordered. On the other hand, it wasn’t “all their fault” because demand signals were showing ever increasing volumes as customers also thought JIC (just-in-case) was a much better strategy than JIT (just-in-time). Unfortunately, unless you follow proactive, intuitive SIOP (Sales Inventory Operations Planning), also known as S&OP and specifically demand planning processes, you will order the “wrong” products. Thus, there is an inventory glut of the “wrong” products in the “wrong” place at the ‘wrong” time.
• Reconfiguring manufacturing operations: As clients realize that they can no longer be dependent on China and other non-friendly nations to supply critical manufacturing goods, they are reconfiguring and reallocating production. Volume has been moving to Vietnam for many years, and India has been gaining steam in recent years. Thus, products have been moving across the Indian Ocean, through the Suez Canal, potentially stopping in the Mediterranean or Europe, and across the Atlantic to the East Coast. Others are taking matters into their own hands and reshoring production to the US and near-shoring production to Mexico / Latin America.

What are the Successful Doing?

The successful are taking control of their supply chain and proactively figuring out how to pivot and evolve to ensure growth and success. Thus, they are in essence creating this disruption; not responding to this disruption. On the other hand, moving volume isn’t always the best option. Review your situation, understand what your ideal customers will need, and CREATE a supply chain to serve your customers successfully, profitably and with the least amount of cash (inventory) tied up unnecessarily.

Our best clients are reallocating manufacturing, reconfiguring logistics, innovating and creating completely new solutions, leveraging technologies in new ways, and flipping the status quo on its head. What got you “here” (in the last few decades) will not “get you there” (to a successful future) anymore. The world is changing, and the resilient are pivoting, reconfiguring, and thinking differently to stand above the crowd.

Please keep us in the loop of your situation and how we can help your organization stack the deck to not only survive but also to be prepared to take advantage of the vast opportunities to come in the next several years. One great way to start your journey is to roll out a SIOP process to better navigate the volatility and uncertainty. Learn more about how to use SIOP to succeed during volatile times in our new eBook SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth. Download your complimentary copy.

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Disruptions in the nation’s and the world’s supply chain came escalated during the pandemic. Despite a slight rebound from the chaos that occurred in the past couple of years, the supply chain is still in a state of flux. The Wall Street Journal recently issued an article on how supply chains are back to normal. Lisa Anderson of LMA Consulting Group disagrees. She says the supply chain will never be normal. Lisa is an expert in this area. Tune into this episode of The Truckers Network Radio Show when Shelley Johnson and Tom Kelley get Lisa’s take on what all of this means to the transportation sector and trucking. Learn how to survive and thrive despite the challenges and shortfalls that may be coming. Be sure to subscribe to our podcast. It’s free.

Click here to listen

Originally published Truckers Network Radio Show on 2/18/2023

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