The past couple of years have been defined by the challenges they have brought with them: a pandemic; a brief recession; natural disasters and other increasingly clear signals of climate change; and, of course, the Great Supply Chain Disruption, among a litany of others. For my first blog post of 2022 -- I’d like to begin by acknowledging some of the victories where supply chain obstacles were hurdled because of skilled leadership, flexible planning, agility, resilience and dedicated workers.
In the last few weeks of 2021, supply chains averted the holiday retail crisis by ensuring that shelves were stocked and packages were delivered in time for the holidays. The New York Times reports that this victory belongs to all segments of the supply chain because they all worked together to fulfill consumers’ needs. Transportation and logistics professionals at ports, railyards, distribution centers and warehouses and on the roads, rail lines and waterways in between worked around the clock to move shipments and packages. Retailers placed orders early to try to beat the supply chain crunch. Distribution companies hired enough workers to keep up with demand.
As a result, store shelves were not bare as feared, U.S. holiday sales were up 8.5% — the biggest annual increase in 17 years —and e-commerce orders were fulfilled even faster than they were before the pandemic.
In the two full weeks after Thanksgiving, the process of fulfilling an ordered item and delivering it took about four days for an item delivered by FedEx, 4.6 days for one delivered by UPS, and more than five days for one delivered by the U.S. Postal Service (USPS). This is about a 40% improvement for FedEx and UPS and a 26% improvement for USPS compared with 2019.
Union Pacific also credits its recent successes to its workers who, in its words, “[grew] with adversity.”
Through Winter Storm Uri in February 2021, Hurricane Ida in August and September, and the California wildfires, Union Pacific employees rerouted trains and rebuilt tracks and bridges faster than expected, including repairing and reopening Dry Canyon Bridge in California in just one month — and a month ahead of schedule. To ease supply chain bottlenecks, Union Pacific reopened shuttered intermodal terminals; added 24/7 gate access for truck drivers at its Long Beach, Calif., intermodal container transfer facility, and offered financial incentives for customers to gate in containers on weekends.
“This year was a testament to the power of teamwork and the ability of Union Pacific employees to overcome challenges with agility and creativity,” the company wrote on its blog.
The ongoing semiconductor shortage has forced many automakers to cut back production. Toyota, however, managed to pull off a supply chain victory by maintaining months’ worth of semiconductor inventory to prepare for black swan events. Although the practice of carrying excess inventory typically is not advised — particularly by Toyota, which used to be known for just-in-time production and inventory management — the Fukushima earthquake and tsunami of 2011 taught Toyota to be ready for anything. Then, when the pandemic exacerbated semiconductor supply problems, Toyota was poised to keep working while its competitors were stuck.
The right skills and knowledge to succeed
Challenges keep coming, and markets keep changing, but we need to keep succeeding. To do this, some of the tried-and-true supply chain practices need to be reconsidered or reconfigured to better fit today’s needs. Now more than ever it is important to stay up-to-date on supply chain knowledge and evolving best practices.
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