We are more than halfway through 2019 and there’s one thing I’m certain about: the weeks and months ahead will be filled with uncertainty.
That’s always the case, I know, especially when it comes to supply chain and logistics, where the uncertainty dial is always turned up to 11.
Here’s a sampling of the uncertainty companies continue to face:
Will the new NAFTA trade agreement (now called the USMCA agreement) get ratified by Congress? Assuming it does, what impact will it have on global trade processes and technologies? What changes will companies have to make to comply with the new regulations?
Will there be another referendum on Brexit? What will happen if the UK exits without a deal, especially when it comes to cross-border trade?
Will the U.S. and China end their escalating trade war or will there be another round of tariffs?
Is there a “new normal” in the trucking market? Will trucking capacity tighten or loosen in the weeks ahead? What will happen with rates?
Will the global economy grow faster or slower? What will happen with interest rates, oil prices, and monetary policies? Will finding labor get easier?
How do you deal with all of this uncertainty? Well, you can take the “ignorance is bliss” approach and just carry on as you were. This approach has worked well for me when buying dinner at airports — until all the fast food restaurants started posting calories on their menu items. Did you know that a small McFlurry has as many calories as a Big Mac?!
Yes, ignorance is bliss, but it may also be hazardous to your (supply chain) health.
Three Steps to Dealing with Uncertainty
Therefore, when it comes to dealing with uncertainty, staying informed of what’s happening in the world — with regulations, the economy, geopolitical activities, transportation and labor markets, the competitive landscape, emerging technologies, and so on — is the first step.
(For a related commentary, see “Supply Chain Learning: Think Beyond Traditional Paths”)
Doing something with this information is the next step. For supply chain professionals, this means using this information to model and simulate a variety of different “What if?” scenarios — What if there’s no Brexit deal? What if import tariffs from China increase to 25%? What if Amazon acquires my biggest competitor? — and developing response plans for each one. Simply put, when dealing with uncertainty, you have to prepare for multiple outcomes.
(For a related commentary, see “How To Combat The Uncertainty And Risks In Today’s Global Supply Chains” and “Supply Chain Design: Growing Scope, Community, And Collaboration”)
The third step may be the most difficult: letting go of “the way we’ve always done things” when all of the evidence suggests there’s a better way forward. This includes letting go of outdated (often manual) processes, outdated technologies, and outdated ways of establishing and managing business relationships.
(For a related commentary, see “Shoveling Snow With A Dustpan (Takeaways From BluJay Solutions’ SOAR 2017 Conference” and “Defining Digital Transformation”)
There are plenty of supply chain and logistics predictions for 2019 and beyond, which will certainly, maybe come true. Or certainly, maybe not.
Either way, be prepared.