s we enter year three of the COVID era, companies worldwide are grappling with an all-too-familiar array of supply chain challenges—supply uncertainties, capacity and labor shortages, long transit times, and sky-
can evaluate much more carefully to see if their production rates have been hit,” says Guru Bandekar, chief supply chain of cer for the company’s Global Tools and Storage business. Stanley Black & Decker dual-sources or multi-sources components whenever possible. If supply from one vendor starts to look uncertain, the company can shift more order volume to a different supplier. When dual- or multi-sourcing isn’t possible, Stanley Black & Decker maintains safety stock, setting the volume based on how long it would take to recover from a disruption. “If it will take us ve weeks to re-source that part, because it takes time to get a new supplier up and running, then, to put it simplistically, we want to have ve weeks of safety stock,” Bandekar says. Supply chain disruptions have dramatically driven up freight rates and lengthened transit times. A container shipment from Asia to the United States that would have cost less than $2,000 a few years ago cost as much as $20,000 in 2021, according to Bloomberg.com. And capacity shortages and port congestion have added weeks to the crossing. “A shipment from Asia to the United States used to take four weeks by ocean,” says Mustafa Hossaini, business
high transportation rates. Tough times call for fresh strategies. As companies seek to reboot their supply chains for better success in 2022, here are some tips on how to navigate the new normal.
data that supports decisions, with new Internet of Things (IoT) devices coming on the market all the time. “But companies should begin the journey now, at least collecting data within their own enterprise, and then extending that outside the enterprise,” Balte says. Data from publicly available sources, carriers, and IoT devices in company- owned or supplier factories can enhance the knowledge base, producing better forecasts. Data analytics can also help you develop more resilient sourcing strategies. For instance, Stanley Black & Decker, based in New Britain, Connecticut, analyzes risks its suppliers face due to COVID infections or various other challenges. Those risks point to potential supply chain disruptions. “We’re able to quickly narrow down the list of higher-risk suppliers that we
Before you develop a supply chain plan, you rst need to establish certain parameters—for example, how much lead time a supplier requires to produce a product, and how much demand you expect. Unfortunately, right now, the gures that underlie supply chain plans are anything but solid. “Supply chain organizations are faced with tremendous disruptions, just trying to respond to the variability that’s occurring,” says Mark Balte, executive vice president, supply chain innovation, at Atlanta-based supply chain solutions provider Logility. A vendor that used to take two weeks to ll an order might require six weeks today but only four next time you ask. A product that’s ying off the shelves today might languish in another month. To manage variability, collect as much data as you can about supply and demand and apply machine learning to develop a sophisticated picture of changing conditions over time. Take demand sensing, for example. “If we put a plan in place four or six months ago, the demand pattern is going to change as we get closer to that demand date,” Balte says. The more data the company collects, the better it can predict actual demand. “We can begin planning earlier, perhaps make a change,” Balte explains. Maybe a company expects a shipment at the Port of Los Angeles. “I was planning to move it to a distribution center in Colorado,” he says. “Now I may only want to move part of it to Colorado and some to Dallas.” Opportunities abound to collect
Since the start of the pandemic, custom plastic injection molder Westec Plastics has seen an increase in inquiries from U.S. companies considering moving their production from overseas to the United States.
46 Inbound Logistics • March 2022
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