How Your Clients Can Address the Ongoing Supply Chain Crisis
The supply chain crisis has seriously complicated global trade. Already battered by the ongoing effects of the pandemic, your clients probably feel the impacts of another interminable crisis – with no clear end in sight. Measures to relieve congestions have been coming from major policy makers, but what can your clients do themselves to maintain competitiveness and stay resilient?
Impacts of the ongoing supply chain crisis
Unfortunately for your clients, much of the damage has already been done. As CNN reported, supply chains were discussed on nearly two-thirds of company earnings calls. And that was in July 2021.
Add to that, alleviating congestion at ports isn’t the only effort needed to de-clog supply chains. Air terminals are also overwhelmed. Once product passes through them, truck drivers are in short supply, as well.
Indeed, the truck driver shortage is a major facet of the ongoing supply chain crisis. The industry has struggled with recruitment and retention. Now, many of its truckers, up to 25 per cent in the US alone, are reaching retirement age.
How bad is the problem? Industry analysts suggest that nearly 70,000 more drivers might be needed. Meanwhile, the industry is experiencing a major upswing in labour actions.
Improve visibility to address the ongoing supply chain crisis
Of course, these latest supply chain challenges just lay bare the risks inherent in the proliferation of just-in-time networks.
Companies – perhaps some of your clients – have sought to increase inventory efficiency, eliminate waste, and lower costs by receiving goods only as needed for production. What they’ve sacrificed in the process, however, is a large measure of visibility.
They can get it back, though. How exactly? We recommend that your clients take the following measures:
- Commit to building a crisis scenario for supply chain disruptions. The best place for clients to start is to develop a crisis management playbook for the supply chain disruption scenario. But aren’t these crisis scenarios reserved for risks that are likely to develop into incidents? We’d say that by now supply chain disruptions meet that threshold – and then some.
- Perform due diligence on their supply chain. What, then, should the effort look like? The short answer is it depends on a number of factors: your client’s location and type of business, its exposure to global trading trends, etc.
The best way to go about determining what your client’s supply chain risk looks like is performing regular due diligence exercises (i.e., quarterly, semi-annually, or annually depending on risk factors) on their entire supply chain; those findings will get fed into the supply chain disruption scenario, which will also be updated as risk changes.
- Don’t let clients fall into this due diligence pitfall. These exercises, however, aren’t a cure-all, especially since businesses fall into one common pitfall. The interconnectedness of modern supply chains means your clients can’t just limit their supply chain assessment to tier-one, or “critical”, suppliers, though these are the suppliers with whom they should be developing their supply chain disruption scenario. After all, these suppliers are themselves at the mercy of their “critical” suppliers, i.e., your client’s tier-two suppliers and beyond.
That’s not all, though – not even close. For many of your clients, the supply chain crisis and worker shortages are starting to bite. Help them address the dual crises with best-practice supply chain resilience strategies, such as the ones prescribed in our guide to supply chain resilience. To get a handle on those strategies, download the guide for more.