Carl Schweihs, Author at Global Trade Magazine

Rising demand, dwindling workforces, and unforeseen delays made for a difficult and frustrating peak season in 2021, where many companies struggled to meet their goals. With the next peak season starting in just a few months, let’s take a look at key statistics and the observations of supply chain and operations professionals for some important lessons to take into the coming rush.

The COVID Curve

Almost three years later and COVID-19 remains the usual suspect behind most challenges to businesses worldwide, including many of the chain disruptions and worker shortages that held operations companies back. The pandemic has a steep learning curve: 4 in 5 companies described themselves as more prepared in 2021 than in 2020, yet that year 80% of companies met their production and fulfillment goals while only 65% met those goals in 2021.

As COVID transitions from pandemic to endemic, companies must continue to account for the virus as a major economic factor and continue to adjust to its challenges. In the coming year, businesses should be more proactive about preparing for COVID-based disruptions, perhaps by switching from a headcount-based to a milestone-based staffing model, or preparing for social distancing, mask-wearing, and hand sanitizing to ramp up again when facilities become more crowded for the peak season.

Hiring Hold-Ups

66% of operations businesses could not fully staff the busiest days of the season in 2021, so recruiters must step up their game in in 2022. 40% of workers reported high stress, low pay, and dissatisfaction with working conditions were both top problems.

The need for better conditions and incentives for workers has never been more apparent, and employers can better reach for their milestones in 2022 by improving company culture and offering leading pay rates and benefits. The best conditions will attract the best talent, raising the overall level of performance and allowing businesses to rely on fewer but better employees to keep operations less crowded and more resilient to absenteeism.

Supply Chain Drain

Nearly half of employers listed the supply chain as a major hindrance during the 2021 peak season. Unpredictable shipments brought worker overtime up 25%. 41% of workers could not keep up with demand, and employers faced more customer and employee complaints as the season wore on.

While alternate suppliers may not be ideal in terms of cost or efficiency, the supply chain crisis shows no sign of easing up. To prevent worker burnout and fulfillment slowdowns during the upcoming peak season, it may be necessary to forge relationships with reliable alternate suppliers, to plan orders further ahead, or even make redundant orders in some cases.

Increasing Automation

Automation helped the operations industry survive the 2021 peak season, reducing workloads, streamlining procedures, and alleviating stress. 43% of businesses used automation in various forms, and 46% plan to use more moving forward, to mitigate the hiring crisis and streamline everything from tracking applicants to interviewing prospects and onboarding new hires.

Computerized platforms can handle paperwork automatically, helping busy leaders focus on coordinating work. Timekeeping, scheduling, performance tracking, and more can all become trivial for companies that embrace automation, so long as they do so strategically.

Companies looking to embrace automation more comprehensively in 2022 should have a clear and actionable plan for how to do so without disrupting operations. Mechanized systems introduced haphazardly could slow productivity before it ramps up.

Future Imperfect

The 2021 peak season was not all bad, and we can certainly learn from the experience. More companies are planning further in advance: 83% in 2021, up from 77% in 2020. Planning cannot completely nullify worldwide difficulties, but can mitigate issues in future seasons.

To deal with labor shortages, leaders should perform more extensive job training as well as cross-training to encourage upward mobility and flexibility for employees. When the next peak season rolls around, employers should work with staffing agencies while pursuing regular year-round recruitment. Increased pay, sign-on bonuses, and further benefits will improve hiring, retention, and job performance.

Staying Ready

Today, 1 in 3 operations companies consider peak-season to be effectively year-round. Thus it is never too early to start planning, and always wise to expect the unexpected. Likewise, there is no shame in seeking out good partners, particularly staffing firms and primary and backup suppliers. Further investment in automation will help deal with rising demand and diminishing workforces. We can be sure that conditions will not return to the old status quo anytime soon, so as the official 2022 peak season comes on fast, successful companies will be those that know how to hire and retain staff, and to roll with whatever punches each peak season provides.

Author’s Bio

Carl Schweihs is President and Chief Operating Officer of PeopleManagement, TrueBlue’s workforce management division specializing in onsite and contingent workforces. He leads three staffing businesses — Centerline Drivers, SIMOS Solutions and Staff Management | SMX — combining innovative, technology-based solutions with workforce strategy to help bridge talent gaps and prepare tomorrow’s supply chain talent for the future.

For the last four decades, manufacturing jobs have left North America. While this has led to lower prices for consumer goods, the supply chain issues laid bare over the last two years have demonstrated the unwritten costs inherent in this shift to foreign imports. Thousands of container ships are stranded in the Pacific Ocean, and many factories overseas are months (or even years) behind schedule. As a result, the cost of items has risen sharply for industries ranging from retail to automotive to construction, and caused brands to focus on how to reintroduce manufacturing to North America on a wider scale.

The Plot of Every Springsteen Song

Manufacturing jobs have been leaving North America since the 1970s, partly due to the perception that the industry has changed in ways North American workers wouldn’t like. But this is largely untrue — manufacturing jobs pay higher wages than comparable “blue collar” positions, and many come with benefits. Before the labor exodus, manufacturing jobs could support whole towns through a middle-class lifestyle. Showing the benefits of these rewarding industrial positions is North America’s best bet to reinvigorate the working middle class that fuels our consumer economy, while helping North American workers learn key technical skills for the new job market. But to do so, we’ll have to change those mistaken perceptions.

Workers aren’t the only ones who would benefit from bringing manufacturing back. Smaller or midsize companies find themselves at a serious recruiting and production disadvantage, even before international shipping went awry. Unlike bigger companies who both have a larger stockpile of goods and talent and who can pay to expedite deliveries, smaller businesses are left adrift with their late arrivals. For these companies, investing in North American manufacturing can secure their supply chains and intellectual property while planting deeper roots in their communities.

The Smart (Factory) Advantage

Cutting-edge technology can give North American manufacturing the edge it needs to compete with inarguably cheaper services overseas. We are in the midst of the “Fourth Industrial Revolution” wherein the manufacturing sector integrates ideas like artificial intelligence, the Internet of Things, and Smart Factories. This increased use of machine learning and automation means the sorts of factories we can build in North America will be more productive than those overseas, while giving employees new opportunities to learn and grow. Those employees will be required more to maintain and program the machines than to assemble stock by hand, and the training they receive will also make for a more agile working class on the continent.

Potholes and Speed Bumps

Of course there will be challenges in reinvigorating North American manufacturing. Modern products, especially the electronics so central to our lives, require worker specialization. Even if a smart factory is automating every step, workers must know exactly what those steps are and how to ensure they’re being automated correctly. This advanced training is part of the overall cost of “scaling up” but in the end serve to illustrate the importance of manufacturing and the careers available for those who embrace the learning and development available in the industry.

And speaking of supply, the manufacturing exodus has caused continental supply chains to atrophy, and these will need to be redeveloped to make delivery from North American factories to North American stores as fast as it is to those same stores from foreign factories. With today’s major trucker shortage, that rehabilitation is easier said than done.

Embracing Challenges

Many North American companies should seriously consider taking these hard but necessary steps to bring their manufacturing efforts back in-house. Not only would the investment pay off in greater independence and control over stock, but also reinvigorate industrial employment sectors in supply chains and manufacturing. While the current status quo is efficient when everything is going right, the past few years have proven how fast everything can go wrong. In those situations, the advantage lies with companies that can provide their own supply of goods and recruit and retain workers who have intimate knowledge of the products and processes.

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Carl Schweihs is President and Chief Operating Officer of PeopleManagement, TrueBlue’s workforce management division specializing in onsite and contingent workforces. He leads three staffing businesses – Centerline Drivers, SIMOS Solutions and Staff Management | SMX, combining innovative, technology-based solutions with workforce strategy to help bridge talent gaps and prepare tomorrow’s supply chain talent for the future.

Industries at Crossroads: The State of Operations 2022 – Supply Chain Drain

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