PUT IT TO THE (STRESS) TEST Flexibility and continuous change management will be critical keys to success. One way to determine how quickly and effectively your organization can respond to changes in demand is to conduct periodic stress tests on your supply chain operations. Through these tests, organizations can identify potential vulnerabilities that may arise amid extreme peaks or extreme lows—both of which we’re likely to experience in 2023— before they are exposed in a real environment. Key areas to analyze during stress tests include people and processes, as well as the organization’s overall ability to scale to meet these ever-changing requirements. Foster a culture of continuous evaluation. In addition to conducting periodic testing, company leadership should constantly be re-evaluating existing plans and forecasts. It’s critical to review, revise, and re ne plans according to the best or most up-to-date information available, such as advanced analytics or historical data recorded during similar economic times. The combination of such historical data along with forecasted scenarios can help inform a more holistic evaluation of what we might expect in the future. More rigor around this process will help prepare business leaders for multiple outcomes and contingency plans.
DIVERSIFY TO REDUCE SUPPLY CHAIN RISK Without diversifying suppliers, sourcing partners, and logistics providers, businesses are vulnerable to any single point of failure. Diversi cation reduces the risk of supply chain disruption caused by market uctuations and the unavailability of certain resources. By having a range of providers and associates, a business can better anticipate and respond to unexpected events. As operating in different marketplaces helps businesses reach new customers and become less vulnerable to niche demand uctuations, diversifying their supply chain can ensure these businesses have access to the right resources at the right time. Additionally, diversi cation helps businesses to familiarize themselves and bene t from new technologies and services that can improve the ef ciency of their processes and help them to adjust to changing markets. Diversifying partnerships can grant companies access to new technologies that help them build frictionless operations that save resources and time, while exposing hidden risks. By having multiple partners, businesses can bene t from new technologies to improve their processes and gain access to a wider range of resources.
–Carmit Glik CEO and Founding Member Ship4wd
–Drew Taranto Senior Director, Strategy (eCommerce) DHL Supply Chain
DISRUPTION MITIGATION TRENDS
In 2023, disruption mitigation within the supply chain will be a key strategy to support delivering on consumer expectations and cost reduction to improve operating margins. Some trends to expect: Continued rebalancing of inbound shipping between West and East Coast ports of entry for reduced lead times and reduced costs. Example: Using ports in Long Beach, California (pictured) , and Savannah, Georgia. In January 2022, there were 109 ships anchored o the port of Long Beach. As of 12/19/2022 there were none. In comparison, as of 12/19/2022, o Savannah, there were 17 anchored awaiting to dock. Increased distributed U.S. ports-of-entry usage for air freight when using direct-to- consumer distribution to improve delivery times and reduced transportation delivery costs. Example: For B2C shipments, splitting volumes into the various port-of-entries using Type 86 or Express Consignment Carrier Facility to meet shipment processing, delivery, and cost requirements. U.S. companies will continue to nearshore manufacturing and warehousing in Mexico that will be located near the U.S. border and use maquiladoras (manufacturing plants in Mexico). These locations include Tijuana, Mexicali, Nogales, Ciudad Juarez, Monterey, and Matamoras. –Chris Lentjes, CEO - U.S. Operations, Eurora
January 2023 • Inbound Logistics 163
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