Will supply chain problems cancel Christmas this year? That’s what many recent headlines would lead you to believe. But while those headlines are mostly hyperbole, the fact is there are unprecedented supply chain challenges this year. The intricate and interconnected processes involved in global supply chain management, from the first mile at the country of origin to the final mile getting to the store shelf or a customer’s doorstep, are being disrupted by unforeseen events.
What factors will make this holiday season different and more challenging than in the past? What are some important capabilities companies need to consider with regards to the first mile, the final mile, and everything in-between? Those are the main questions I discussed with Gary Barraco, Assistant Vice President of Product Marketing, and Bryant Smith, Director of Product Management, at E2open, during a recent episode of Talking Logistics.
What’s Different This Year?
I began our discussion by asking Gary what’s different in supply chain this year that has led to the dire headlines. Gary notes the many disruptions across supply chain processes.
“Massive dislocations are present in the container market, shipping routes, the ports, air cargo, trucking lanes and rail lines,” says Gary. “And we’re also hearing of space shortages in warehouses and distribution centers. This has caused component shortages, backlogged orders, delivery delays, and of course, increases in transportation costs and consumer prices.
“These challenges go back to before the pandemic to the trade tensions with China and other nations,” continues Gary. “Brexit was another trade stumbling block. And then it all spiraled into COVID-19. So, there are multiple issues and solving them all is the main challenge we’re facing.”
Getting Past the First Mile
There has been a lot of focus recently on last mile delivery. But the fact is that you can’t get to the final mile until you solve the first-mile challenges. Bryant mentions, for example, that based on its Ocean Shipping Index, it now takes about 70 days on average to ship freight globally.
“There are ways to collaborate with suppliers to begin addressing these delays,” comments Bryant. Such as, “How can I share the demand I’m seeing with my suppliers so they can help me fulfill the orders to my customers. Giving suppliers forecast visibility allows them to plan ahead.
“Getting status updates from suppliers helps customers to react to changes in their supply chains in real-time. Global trade management also helps shipments to cross borders frictionlessly and not get hung up. And finally, making sure the handoffs between modes and carriers go smoothly is very important.”
Gary sums it up nicely, “It takes a village to make sure the Grinch doesn’t steal Christmas.”
Winning the Final Mile
More than ever today, delighting and retaining customers is all about what happens with final-mile delivery. I asked Bryant and Gary how companies can win this critical step.
Bryant notes that collaboration with carriers and customers is as important as with suppliers. “With carriers, you want them to know the constraints you’re under and to make sure they have the capacity you need for your lanes. And share your demand forecasts with them so they can plan ahead and prepare.
“For customers, you want to make sure you are setting appropriate expectations so that you’re not over-promising and under-delivering.”
Gary adds that cost is always an issue and technology can help you compare your carrier’s rate with rates from other carriers servicing your lanes. “Technology has really changed the way logistics operates,” Gary says. “Whether you’re looking for the best rates, finding capacity, or optimizing the best route, leverage technology to keep your costs lower.”
The Importance of Visibility
A lot happens between the first mile and the final mile, and that’s why supply chain visibility is so important. Gary explains that the complexity of modern global supply chains creates gaps in visibility that increases costs and causes customer service issues. With all of the shortages in components, labor, and truck drivers, how can visibility to data help bridge these gaps and overcome shortages and disruptions? Gary provides insights on this through the lens of a See-Understand-Act-Learn process. Likewise, Bryant shares several important software and network capabilities that differentiate leaders in the supply chain. Therefore, I recommend that you watch the full episode for all of their insights and advice. Then keep the conversation going by posting a comment and sharing your own perspectives and experiences on this topic.
