Supply Chain Disaster 2021
The supply chain… For as long as we can remember, it has never failed to deliver. Well, if we go back into history, the very first time was 1995 with Apple when they failed to deliver due to being conservative when they had their inventory strategy. When they could not deliver, they could not recover…
Foxmeyer Drug had an even more disastrous situation in 1996 when new order management and distributions systems did not work and the fulfillment costs targets were unattainable… The result, huge sales losses and ultimately, the company filed bankruptcy.
Here's some more for you to take a look at from the past:
Burst into 2021 and here we are with one of the largest disaster delivery situations ever. As of last Friday, we and 65 ships were waiting to unload in the ports of Los Angeles (according to FreightWaves). This further delays product reaching our consumers.
What happens when there is a lack of product? Prices go up. According to Department of Energy, fuel costs, as if we don’t already know, have gone up 37% and load-to-truck costs were up more than 70%.
Companies plan work, employees, overhead based upon forecasting. How do you forecast what is happening now? Not only that, add in that forecasts can be wrong.
The next time you go out to a local restaurant, are you noticing signage? “Due to limited deliveries, some menu items will not be available.” In Ocala, FL, you cannot visit a Subway and order bacon, egg and cheese… Why? The company has not had delivery of eggs in weeks.
It’s going to take time to correct this. We all have to be patient. Some things you will notice prior to correction:
· Cost of building material will go up
· Gas prices going up
· Empty shelves
· Less selection
· Minimum orders online
The supply chain is already stressed and the Holidays have not even started. Business will be challenged and stressed.
The best part in all of this is that new ways of doing things will emerge! We will overcome and we will get through this together. In all disasters or struggles, new things develop! It’s hard, but we can handle it.