When we thought it was all over, it starts up again. For two years all market places had experienced major supply issues due to huge disruption within the supply chain. Some of us were starting to think that maybe the end was in sight.
But no….
Any one of these factors could prove sufficient to blow even the best-planned
supply chain off course. As China, the world’s factory, struggles with pandemic enforced port closures, supply chains that were already under stress are reaching breaking point. The world is redrawing its
economic activity to cut out Russia after its invasion of Ukraine – an action that is affecting supplies of grain and cooking oil, as well as the oil we use to power our factories and vehicles. Catastrophe is being piled on top of catastrophe.
“The expanded global nature and contracting diversity of supply chains have
together exacerbated this effect,” notes
Tim Morley, regional director at Information Services Group, a global research
and advisor.
In response to the War in the Ukraine …..
“Supply chains have not had time to recover, and we now face a critical tipping point that could have both supply and cost ramifications rippling through industrial and consumer markets for years to come.” (Kate Tamblin is chief product officer at risk management specialist Achilles and author of the company’s supply chain resilience index).
And more ….
“We’ll continue to see disruptions unless countries and businesses get serious about
building resilience by holding more inventory and excess capacity as well as
restoring industrial capabilities that have been offshored,” Professor Johnson, Head of Operations management, Warwick Business School.
So many quotes and so little comment .There a number of factors not included; pent up demand, falling demand, changing demand and labour shortages. Reflecting the complexity of the issues we are all facing I struggle to add what has already been said by much better commentators than some geezer who waffles on about party products. But struggle I have and there is stuff I have to say.
But before that , here is another graphic ( I hesitate in using the word interesting ,as it is much overused but seldom relevant when it comes to Graphics) , which , to me, is quite illustrative (its a graphic, it should be ).
Quite simply that it suggests that despite that massive use of IT and data the biggest influence on decision making process is People.
People are complex. Nothing new there. Yet, that complexity has been muddled or at very least changed by Covid . This impact is yet undefined and consequently unknown. But there has been a significant psychological change in us all . As in us all ordinary folk. Impacting both consumer and all those within the supply chain. Decisions will and are being made differently. There within in industry there is much uncertainty over everything from supply to demand that the decision making process becomes more hazardous because there is little historical data to work from.
I can’t speak for anyone else, but now, I often question a decision purely on the basis that I am very uncertain of the outcome. Where in the past I could have quantified the outcome because of previous similar decisions and their outcomes. Within industry many decisions are having to be made without really knowing the consequences outside their own market place, despite the fact that a bucket load of stuff is happening outside their market place which is affecting them in turn. I suspect product sourcing is undergoing its biggest change in the last fifty years.
Decision making has changed, we all know sort of why but few if any know ‘What To’. It still does not alter the fact that getting your Gear is not going to get any easier for some time to come. If you are UK based you can look forward to a possible National Rail strike this summer, which will throw another spanner in the works. Is there a connection with everything else ? Probably, for a couple of reasons….
- High inflation created by the Ukraine War, post covid disruption and energy issues, leading to pressure on wages .
- High Employment and shortage of labour
- All of the above puts the Unions in quite a strong bargaining position.
So nothing is going to change for some time. Or rather loads of things are going to change but we are not sure what. However, we can be pretty certain that the supply side is going to be very bumpy for sometime to come.
Finally, for those who are, oddly, not aware of any supply issues , just go into any major supermarket chain and take a peak at the empty spots on the shelves. And if any one chain has filled them then look at what they have filled them with (eg doubling up on product that usually would not warrant that space ).
And a bit more finally, if you are not experiencing stock issues, and are not expecting any, Well Done ! What’s your secret ?
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