Anita Raj, Author at Global Trade Magazine

By the first quarter of 2022, most companies hoped pandemic-related supply chain disruptions would be a distant memory. But new complications arose: port congestion, raw material shortages, labor challenges, inflation, and an ongoing war in Ukraine led to bottlenecks in every link of the chain over air, sea, and land. At the same time, climate change caused the threat of natural disasters to loom ever closer. As a supply chain leader, you may have to adapt quickly by the day, or even by the minute, to navigate uncharted territory. Here are key strategies to help you stay on top in the coming year — no matter what arises.

Top Supply Chain Challenges

Research suggests supply chain issues will continue to affect supply chain operations through 2023. There was a shortage of over 80,000 truck drivers in the United States in 2021, and that number could reach 160,000 by 2030. This scarcity is having a strong effect on retailers.

Similarly, a lack of warehouse space prevents retailers from meeting consumers’ expectations. Warehouses are already overflowing; there is no more available space to fill. The only solution to rising consumer demand seems to be acquiring new warehouses, which is expensive. Real estate prices have skyrocketed due to competition from other industries for the land and building supplies needed.

Furthermore, since the pandemic began, online shopping has trended upward. Consumers expect more items from retailers, and they expect them promptly. However, this stretch on the supply chain will likely reduce retailers’ abilities to keep up with customer expectations. All of this presents you with problems in the coming year.

How to Stay on Top of Today’s Biggest Supply Chain Challenges

Short-Term:

Leverage near-term trends and patterns.

Given the constant upheavals of recent years, accurate, effective demand planning has become a top priority for businesses worldwide. With proper supply chain planning, you can sense demand for the near term, taking into account real-time market fluctuations. This helps you accurately plan and forecast demand, keep your expectations realistic, and ensure the right amount of product is available in the right place and at the right time.

Refresh your products.

Over- and under-ordering, producing, stocking, and spending have led to the unimaginable wastage of material, free cash flow, and sustainability in businesses across the world for decades. By identifying a roadmap of top-priority products based on sales and margins, you can quickly rectify and effectively accelerate your bottom line, thus driving a sustained market advantage. You can effectively save costs by leveraging optimized production, product mix, material movement, inventory management, and asset utilization.

Long-Term:

Fine-tune your forecasting.

Of course, you can’t predict the future, but you can closely monitor your flagship products and track their prices, delivery times, and other factors. For example, if the price of a key product suddenly goes up, that could mean that a supplier is having trouble delivering. Determining when and why suppliers are struggling can be important for the early identification of disruptions in your supply chain. Don’t wait for critical products to stop showing up at your door or until prices soar sky-high.

Look around you.

If a particular supplier is giving you trouble, can you switch suppliers? Maybe shift from an overseas manufacturer to one that’s closer to home? If you can’t source one manufacturing component, are there any alternatives you can look into? Taking variables like shipping time into account when considering your supply options may help you choose the best choice for your business. For example, transportation costs from Southeast Asian markets have been increasing over the last few years, but a supplier in Central America could be an affordable alternative.

5 Supply-Chain Strategies to Keep Your Business Relevant

Use accurate forecasting.

Correct forecasting can help you anticipate changes in customer demand so you can determine how much inventory you should have. Maintain close communication with your customers to understand their current needs and wants. Be willing to adjust your offerings as needed to keep up with changes in the marketplace. Meanwhile, keep a close eye on your competition and what they are doing to stay ahead of the curve.

Invest in artificial intelligence and other technology.

Implement artificial intelligence solutions and advanced analytics to make data-driven decisions. This can include tools that offer real-time insight into your inventory levels, orders, and supplier performance. Knowing this information can help you avoid the worst supply chain volatility.

Understand supply chain challenges and how they affect you.

Supply chain management is about more than just sourcing raw materials. It’s about understanding and optimizing all the processes in between. That’s why it’s important to utilize existing data, analytics, and modeling tools to analyze your supply chain operations and identify areas of risk and potential improvement opportunities. Look for ways to optimize processes, reduce waste, and improve efficiency across the board.

Reevaluate your inventory location.

Consider where your inventory is located. Does it make sense to move it closer to your customers? If not, think about other ways to optimize your supply chain and distribution processes to stay ahead of the curve.

Make contingency plans.

Always prepare for unexpected disruptions or crises by having plans to keep operations running even if something goes wrong. For example, how long can you hold out if you can’t move your product due to a disruption? Do you have a line of credit so you can secure a cash flow or get a short-term loan? How many customers can you afford to lose if you can’t sell a key product? Whether it’s dealing with natural disasters, labor strikes, regulatory issues, or any other problem that might arise, be prepared to take swift action to mitigate the impact on your bottom line and reputation.

Above all, stay focused on continuous improvement, whether that’s leveraging new technologies or finding creative solutions to today’s enormous challenges. The demanding supply chain landscape requires constant evolution and adaptation. Still, with careful planning and a willingness to take risks, you can ensure that your business remains competitive for years to come.

Author Bio

Anita Raj is a seasoned technology thought leader and product marketing expert for building impactful go-to-market strategies for targeted markets such as Europe, the U.K., and the U.S. She is the vice president of product marketing at ThroughPut Inc., responsible for the vision, strategy, and execution of go-to-market and product marketing initiatives, including value proposition, product launches, customer marketing, and product life cycle marketing.

Nearly two years on, the pandemic and its effects on the supply chain are still going strong. The ability to move cargo has never been this severely impacted on such an ongoing basis. Several hub ports and gateway terminals are facing COVID-19 peaks due to high yard density, creating bottlenecks that back up arriving shipments on one side while wrecking delivery and distribution on the other.

As the queue of stranded vessels crosses 100 ships in Southern California ports, many export, logistic, and supply chain leaders are left wondering: Is this an indicator of things to come in the so-called new normal?

Thankfully, the short answer is no. Although port congestion — and supply chain disruptions in general — cause concern across governments worldwide, the good news is that they can be managed and even averted. All it takes is smart management, timely intelligence, and informed planning.

True Causes and Effects of Port Bottlenecks

Today’s rampant logistics disruptions in ports were exasperated by the pandemic, but the underlying supply chain issues aren’t new. One of the biggest mistakes businesses still make is the failure to plan for demand. When waiting times for container ships stretch to several days, the worst thing to do is send out another few thousand orders.

Despite decades of exacerbated logistics expenses due to unoptimized demand planning, however, businesses still haven’t prioritized effort and resources. Many continue to operate indiscriminately, receiving and fulfilling orders on an as-is, when-is basis with little thought given to optimizing effort and spend.

This results in larger unsold inventory piles, greater operational costs, and higher CO2 emissions. In fact, pollutant emissions in the four largest shipping ports in the world have increased 79% since the pandemic began. By 2050, scientists estimate maritime shipping will account for 17% of global annual CO2 emissions.

Obstacles in the Way of Sustainability

Although prioritizing a lower carbon footprint in maritime transportation and logistics isn’t difficult, it’s only possible with full, real-time visibility into supply chain operations. But modern supply chains are under immense pressure from start to finish.

On one hand, there is the perpetual challenge of rising costs and slimmer profit margins. On the other is the challenge of growing demand for more everything in less time. As if those issues aren’t enough, supply chains are becoming increasingly complex over time, as consumers now have multiple routes to market. Businesses throughout the supply chain must cater to each of these channels.

Finally, there is the constant pressure of growing environmental and sustainability regulations. As consumers become more ethically aware and resources become more scarce, regulatory bodies across the globe are cracking down on businesses to adopt less wasteful, more sustainable approaches to operations.

Regardless of these forces, however, one truth remains unchanged: As customer demand evolves, the need for speed, quality, and a superlative experience grows. The only way to address these issues in maritime shipping is to maximize value across the supply chain. When material flow is lean and streamlined, it allows for highly optimized operations at an end-to-end level.

Steps to Fix Unsustainable, Inefficient Shipping and Supply Chain Chaos

By producing just enough to cater to demand, companies can minimize environmental impact. In doing so, they can cut down emissions and excess inventory across the entire supply chain. Additionally, companies should make the most of limited inventory availability with minimal changeovers while prioritizing the minimization of their carbon footprint.

Imagine a pullback car that’s zipping ahead. Before it goes five seconds, another car is sent hurtling right after the first. This goes on until there’s a pileup that looks shockingly like rush-hour traffic on a Monday morning. Now, think of the same thing happening with order shipping and maritime transportation.

The pileup can be averted by increasing the window between two consecutive orders and collating more orders into a single shipment. To make the shipping process more sustainable and efficient, export, logistics, and supply chain businesses can follow these steps:

1. Accurately predict demand.

When historical sales data is viewed with a host of related factors, such as order volume, purchase trends, product mix, and revenue, it reveals a clear pattern of demand. This makes it possible to predict demand accurately for the near term and different horizons. When you can predict demand proactively, you can efficiently plan resources to minimize waste and accelerate a smooth, continuous flow of goods and cash. Businesses should use AI to monitor and predict demand changes so they can focus on what will sell, thereby eliminating early production and over-ordering down to the exact location, increasing availability, and maximizing on-time, in-full orders.

2. Segment and prioritize feedback.

Once businesses know the demand they’re catering to, the next step is deciding on the order of priority when fulfilling that demand. This is where demand and customer segmentation play a key role. Prioritized grouping of orders ensures fewer shipments, lower logistics costs, and minimized disruptions in the supply chain.

3. Combine all data.

Traditionally, businesses have adopted a siloed approach to analytics and AI projects and enterprise-wide rollouts. This is a flawed approach, however, because business operations are continuous by nature. Therefore, compartmentalizing data only leads to a myopic view of a large planet. When operational data is viewed in continuity, it affords a big-picture look at optimization without impairing overall operational goals. Even better, it will likely improve those goals.

The maritime transportation and logistics industry struggles with a multitude of sustainability and supply chain challenges. Disruptions in planning and a lack of clear insight into customer demand result in over-ordering, over-stocking, and over-producing materials. This “over-everything” results in higher CO2 emissions, stock-outs, and millions of dollars in lost sales.

Port congestions and supply chain bottlenecks affect the local, regional, and global markets, so much so that the crunch on container capacity could last until Q4 2022 with container prices surging. Companies should look at reducing waste, transport, and CO2 to increase their material movements, free cash flows, gain competitive market advantages, and ultimately run more sustainable businesses.

Author’s Bio

Anita Raj is a seasoned technology thought leader and product marketing expert for building impactful go-to-market strategies for targeted markets such as Europe, the U.K., and the U.S. She is the vice president of product marketing at ThroughPut Inc., responsible for the vision, strategy, and execution of go-to-market and product marketing initiatives, including value proposition, product launches, customer marketing, and product life cycle marketing.

How to Manage Your Supply Chain No Matter What Comes Next