Supply Chain Breakdown 2022

With every new year comes an opportunity to foretell what lies ahead in the marketplace, and the supply chain breakdown 2022 is no different. The past several years has proven environmentally unprecedented across many fronts, including logistics and supply chains overall.

What’s in this article:

• What are the top trends I will need to watch in 2022?

• How can I prepare for the rise of consumer demand?

• Is there any relief in sight?

Part of my job as Chief Marketing Officer for BlueGrace Logistics is to research, develop insights and offer perspectives to our shipper, carrier, and employee stakeholders, among others. I have the privilege of working with industry experts, thoughts leaders, shippers and carriers of all sizes, technology providers and a host of other resources that have a critical pulse on our economy, government affairs, manufacturing, consumer behavior, technology, digitalization and much more. Here are some headlines and trends to watch as the supply chain breakdown 2022 unfolds.

Labor Pool and Resources

Our workforce remains a top concern for all businesses. The effects of new COVID variants like Omicron, as well as dynamics in government regulations around vaccines, shutdowns or other mandates are having a profound impact on our labor pool.

Considering extra measures and diligence for the health and safety of our driver and warehouse pools is crucial to keep them available and interested in keeping America moving

Our nation’s truck drivers and warehouse workforce are being challenged and with every reduction in these resources comes more pressure on available capacity, product shortages and more. Considering extra measures and diligence for the health and safety of our driver and warehouse pools is crucial to keep them available and interested in keeping America moving.

Consumer Behavior and Demand

Consumer spending and ecommerce are large drivers of the supply chain. Inflation could impact the supply chain if spending slows due to increased prices, including oil. While supply chains have come a long way in meeting the consumer demands of ecommerce, the delivery of large or bulky good items have experienced challenges. Televisions and other electronics, appliances, automobiles, class 8 trucks, trailer manufacturing and more are experiencing shortages and greater supply chain problems. Build a significantly longer lead-time when shipping bulky goods, and secure as much capacity as your budget allows into the future to account for the pressures on capacity and service in this area.

Warehouse, Storage and Inventory

We are in unprecedented times and at historically low inventory levels across many sectors. The inability to deliver product and growing cost of lost sales are triggers to contemplate increasing inventories long-term. Reevaluate inventory levels, storage capacity and overall strategy. The cost savings of lean, just-in-time supply chains have an adverse effect on overall spend when paying significant premiums on capacity and service to get goods to the end consumer. Buying storage into the future could offer a buffer from material outages and regional/local distribution.

Weather

Unpredictable and damaging weather conditions continues to be a threat to supply chains. Hurricanes, blizzards, floods, tornadoes, etc. seem more common today than environmentally ever before. With these weather disruptions comes reductions in workforce, tightened capacity, fewer logistics options, increased risks, and increased costs. Establishing a weather-related strategy to insulate disruptions to supply chains has proven effective.

Your critical-weather supply chain strategy that includes:

• Early replenishment of inventories wherever and whenever possible
• Developing a weather-related routing guide that provides deeper access to capacity and local providers
• Developing relationships with FEMA related 3PLs/carriers
• Selecting 3PLs/carriers based on their ability to adopt and service during inclement/natural disaster times; understand their strategy
• Increasing open and advanced communications between organizations
• Making weather disruptions and disasters a part of overall business continuity planning

Managed Logistics Alternatives

With so many forces at work, and risks in today’s supply chain, the trend for adopting a managed logistics outsource will increase greatly. More and more shippers of all sizes will look to industry leaders who poses the expertise, engineering, operations, workflow processes, communications, and intelligent technology platforms to handle their supply chain and logistics needs. Proven strategies, efficiencies in automation and integrations, predictability and continuous improvements can be outsourced to achieve successful outcomes.

Is there any relief in sight?

There are so many dynamics to consider for the supply chain breakdown. Is there any relief in sight? There can be for those that are open to change and employ agile, flexible tactics. Organizations that have access to clean data and deep archives of historical information that can benefit by creating action, optimization and prescriptive decision making for their supply chains.

Consistent trends for 2022 will be the ability to manage change with agility, pivot efficiently in times of disruption, continuously improve and operate in a safe and healthy environment. Consider these traits and the topics above key elements in your supply chain strategy for 2022 and beyond.