challenges

5 of the Biggest Challenges in the Supply Chain Right Now, According to Industry Leaders

During a recent SCLA Executive Think Tank group discussion, I asked my fellow supply chain industry leaders what challenges they're facing now that are "keeping them awake at night." Several individuals raised points that are worth sharing with the broader community as we continue to navigate back to smoother sailing in 2021.

The good news is that our SCLA Economist, Dr. Walter Kemmsies, had several positive economic updates to share, which suggest that all of these challenges can eventually be met head-on—and overcome. It won't be without extraordinary efforts from our supply chain professionals, however. Of course, we're used to working hard!

Nearly all of these challenges are tied to the ongoing COVID-19 recovery, though many of us are also attempting to keep up with the shifting political climate in the United States. It's a lot for anyone, but there's no question that our best supply chain leaders are dedicated to learning, growing, and innovating as we establish our "new normal."

1.   New Executive Orders from the White House

My colleague Rear Admiral Mark Heinrich, CEO of Oakleaf Software, shared that he is working to stay up-to-date on President Biden's new executive orders to understand how these policies will affect the supply chain. Those related to the environment will affect the supply chain's cost concerning such regulations as CO2 generated per mile—and more. RA Heinrich spoke about remaining on the leading edge of creating a green supply chain to ensure compliance with changing regulations.

But the orders surrounding environmental impacts are not nearly the only ones we need to think about. Dr. Kemmsies cited five more—including the proposal for a $15 national minimum wage to be phased in by 2025 and several orders related to COVID-19 recovery—that will certainly have far-reaching effects throughout the supply chain industry and our larger global culture.

2.   What People Will Spend Money On for the Rest of 2021

Jess Godin, SVP, Supply Chain at Giant Tiger, shared that not knowing what kinds of merchandise consumers will be purchasing over the next 6-10 months is affecting inventory planning and operational goal-setting in her business. And it's clear that this is a big unknown with far-reaching impacts.

Throughout the pandemic, consumer spending has been focused on things that make folks comfortable and busy at home, like home decor, home entertainment, and more. But at some point, people will again be freer to travel, eat at restaurants, go to live events, etc.

When is that point? We simply don't know yet.

3.   Team Member Morale

Though we didn't discuss it at length in our most recent Think Tank discussion, the issue of keeping morale up among our supply chain team members has been voiced a number of times. Ms. Godin also raised this challenge again—because there is no doubt that our people are at a breaking point in many organizations.

Looking back at my previous article about work-life balance when working from home, it's clear that our "always-on" work culture—even among employees who are not primarily working remotely—is harmful. How do we create healthier teams without sacrificing productivity?

4.   Fearing That We're Not Preparing for "Next Time"

Several colleagues have expressed the concern that it does not seem like our culture is learning any enduing lessons from our pandemic experience. However, it does appear that plenty of individual organizations and employers are making changes that will allow for better resilience if there is a "next time."

Bill Abington, President of Global Operations at Medline Industries, Inc., noted, "When it comes down to it, we'll get back on track. Companies are doing a lot of unique things to protect their supply chain."

Of course, no one expected the COVID-19 situation to be global or for countries that we're getting imports from to be shut down. Taking a hard look at sourcing and our partnerships around the world will need to be part of managing future risk.

5.   Just Plain Uncertainty

Despite heroic efforts from some of our talented supply chain leaders involved with Operation Warp Speed, the vaccine rollout has not gone as smoothly as anticipated. To make matters more complicated, there are now also new virus variants that may affect vaccine efficacy.

We're joking when we long for a crystal ball to tell the future, but many of our traditional forecasting tools and methods have been insufficient during the past year. And as we wait for the vaccine administration rate to pick up and America to reach so-called "herd immunity" against COVID-19, we're continuing to play the waiting game on the economy to come roaring back to life.

While the Congressional Budget Office said that we will regain the 2019 level of GDP by this summer (and they have a good track record in accurate forecasting), there are still many variables we simply can't predict.

Are You Experiencing These Same Challenges—or Others We Haven't Discussed?

At SCLA, we believe that improving the supply chain takes all of our industry leaders' efforts, which is why we constantly share knowledge, cooperate on research, and work to answer the big questions. Please feel free to connect with us on LinkedIn to share your perspectives and join the conversation!


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Tuesday, 19 October 2021

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