Inbound Logistics | January 2022

SCSECURITY

Puerto Rico is an example. Its pharmaceutical industrial base is experiencing a lift post-pandemic. Shifting production closer to home enables companies to sidestep port congestion in the China to Los Angeles- Long Beach lane, too. America must encourage and incentivize business to manufacture in multiple locations or risk watching a dangerous, dysfunctional supply chain we created ourselves one day cripple the nation. Landed transportation is the national security linchpin. The success of inventory, reshoring and nearshoring strategies hinge on reliable inland transportation. While the federal government is making moves to strengthen certain critical supply chains, it is equally important for individual producers to complete the task by diversifying their carrier mix to mitigate a world of risks to Americans’ basic needs. With more and more global supply chain disruptions being out of companies’ hands, companies need to take measures to diversify supply chains that provide individual security. In that way, we all play a role in increasing national security. n

Amer ica must encourage and incentivize business to manufacture in multiple locations or r isk watching a dangerous, dysfunctional supply chain we created ourselves one day cr ipple the nation.

Companies that rely on often- unpredictable ocean transport are driving an increase in production lead time to 88 days—the highest level since 1987, according to the Institute for Supply Management. BUILDING ON THE BIDEN-HARRIS ADMINISTRATION’S CALL FOR RESHORING. A signicant part of the Biden-Harris Administration’s plan supports domestic sourcing strategies for key materials and products, but what about the basics individuals suffered without during the COVID crush? Promoting domestic production mitigates supply chain risk at the source. Diversifying manufacturing origins is another option. Nearshoring options in Central America and the Caribbean can mitigate the risk of being too heavily leveraged in source countries, trade lanes, and ports of entry.

management practices and sourcing strategies, they can bolster national security in a way that the government isn’t equipped to do on its own. Diversifying transportation partners is a key component. During the pandemic, producers with limited relationships with trucking companies were left with few options when their carrier partners failed. Their fates were tied. For that reason, Tucker Company Worldwide favors a diversied approach that leverages micro-carriers, readily available and easily adaptable in changing conditions. Economics of the marketplace are favorable for small eets to start and grow. The growing availability of multiple owner-operator trucking companies, and small to mid-sized carriers insulates manufacturers from uncertainties and provides options during disruptions like we saw during the pandemic. To build a diversied transportation strategy, manufacturers have an incredibly challenging time hiring these carriers on their own. There are too many. They may never encounter that carrier again, and with the myriad of contracts, insurance, and other variables, it’s too much to manage. Alternatively, they can work with freight brokers who work with carriers of all sizes and specialties and will vet and negotiate on behalf of shippers. Retailers are holding more safety stock and increasing lead times. Inventory strategies that hold safety stock and disperse inventory geographically are another means of ensuring supply chain continuity. As a result of pandemic- related shortages, 43% of companies surveyed by Gartner said they were increasing inventory and 11% planned to do so within two years, indicating a major move away from just-in-time practices is underway.

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January 2022 • Inbound Logistics 91

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