Global Supply Chain Myths and What They Mean for Distributors
It feels like years ago when we were being warned of impending holiday shopping perils. Warnings turned to reality as shelves were empty and online orders were uncharacteristically delayed, if not significantly backordered. What some thought was a particularly strained holiday season had become an ongoing and frustrating part of our daily lives. Sure, this is nothing distributors haven’t faced at one time or another. However, the supply crunch feels especially uncertain right now. As a result, global supply chain myths and misconceptions have run rampant.
Myth 1: Operating 24/7 Will Solve the Problem
In November, President Biden announced a deal that would expand the Port of Los Angeles operation to an around-the-clock model. Considering the massive backlog of ships just waiting outside the port, this move was supposed to loosen the traffic jam. And, if it did, maybe that would show that the key to alleviating the delays in the global supply chain is widespread, nonstop operation.
However, this isn’t enough. Some of the largest ports have already moved to 24/7 operations. Yet here we are; disruption still present. Expanding hours to smaller ports could still help, but this doesn’t even consider the labor shortages that all dock worker and trucker roles face.
Myth 2: Adopting Greater Automation Will Solve the Labor Shortage
On labor shortages, we should explore the apparent solution: automation. Technology has made incredible strides over the last few years. More and more businesses realize that the most significant advantage automation has over humans is efficiency. For example, they’re incorporating it into their everyday business affairs in revenue intelligence software or manufacturing. Telsa made a ton of buzz when they announced the Semi, a self-driving, electric semi-truck. But, while all of this is incredibly exciting, there are two glaring issues with automation.
First, right now, automation works best when performing the exact thing the tech was programmed to do. What automation doesn’t have over humans yet is the ability to adapt. So far, there’s little flexibility and the error tolerances are simply too small to alleviate the issues causing such disruption in the global supply chain. As distributors, you know that to be all too true.
Secondly, automation may be the future, but we live in the present. Not only do we not see Tesla Semis driving away from the Port of Los Angeles, but we barely even see Teslas driving themselves off of highways. The future may be full of autonomous labor, but the supply crunch is here now.
Myth 3: Your Data is Always Right
White Cup’s revenue intelligence platform stresses the importance of capturing your data, drawing insights from your data, acting on your data, and measuring the results of your data. Simply put: we trust the data. Data will always present you with the facts. However, a massive piece of the puzzle is recognizing that sometimes the data tells you to take the conversation offline. Sometimes, the fact is that you need to open your eyes to what’s going on outside of the data and with your customers.
You are likely no stranger to forecasts and predictions. In any typical year, or after two years of the pandemic, your projections are probably reasonably accurate. However, today’s global supply chain isn’t going to play by historical patterns or indicators. No amount of energy or resources will prepare your model for the unpredictability of port backlogs, multiple “unprecedented” weather phenomena, or another variant wave.
Myth 4: Global Supply Chain Issues Will Disappear in 2022
We’ve all felt at one point or another that the supply chain disruption was temporary. We felt that in the first wave of the pandemic. We felt that during trade disputes. We felt that during the big storm (any of them). We felt that during the great resignation. We felt that during the holiday season. Here we are in 2022, and the disruption is still here.
There’s been little indication that the global supply chain will resolve soon. All sectors have felt the effects and are expected to feel the impact until at least the end of the year. However, this only really accounts for the backlogs of orders that factories and shipping are trying to catch up on. Another event could continue to push the crunch farther into the future. So, as you can see, the end of supply chain disruption may also be a thing of the future.
While the myths surrounding supply chain disruption tend to draw incredible pessimism, they are not definite. There are actions that distributors can take now to mitigate the harshest effects. Revenue intelligence provides an opportunity for players in the distribution industry to protect their revenue and succeed in the face of ongoing global supply chain issues.
