Recent events have underscored the vulnerabilities present in global supply chains, particularly highlighted by Hezbollah militants' use of hand-held pagers in lethal attacks in Lebanon. This incident reveals the complexities of supply chains that make them difficult to police, increasing the risks of infiltration by malicious actors. Hannah Kain, CEO of ALOM, has emphasized the urgent need for enhanced security measures to protect critical supply chains from external threats. In response to these vulnerabilities, there is a growing advocacy for reshoring and nearshoring to reduce reliance on distant factories, especially in China. U.S. administrations have been pushing for supply chain localization, implementing tariffs and subsidies to support domestic production. Companies such as Walmart and Columbia Sportswear are shifting their production closer to home, reflecting a broader trend of reconfiguring globalization rather than abandoning it altogether. This shift focuses on reducing distances in supply chains while maintaining efficiency. The recent attacks serve as a stark warning about the necessity of securing supply chains against potential threats, highlighting the interconnectedness of global trade and national security. [bd2b2776]
During the Cold War, a debate arose over the role of economic planning. New research finds that the top 1 percent of American companies control 90 percent of U.S. production-related assets and account for 80 percent of sales revenue. Supply chain planning is crucial for these companies, as it involves coordinating activities across global supply chains. However, planning dysfunctions such as empty shelves, excess inventories, and innovation delays are common. Outdated planning technologies, gaps in talent, and overstretched supply chains contribute to these dysfunctions. Automation and high-quality data coupled with sophisticated analytics have the potential to overcome these challenges. Planners today need to be comfortable managing ambiguity, leading change, and adapting to new technologies. The global scope of supply chains also presents challenges, including moving inventory around the world and dealing with risks such as global conflicts and infrastructure breakdown. The article suggests that planning failures can lead to business failure for individual companies and produce both excess and scarcity at the economy level. The question is whether it's possible to plan our way to prosperity in the face of these challenges. [31f39ed8]
Lean production, introduced in the 1980s from Japanese automakers, caught on in many US industries. It was a whole bundle of techniques to maximize profit, including ratcheting up workloads and pace to the point of breakdown, and inviting workers to brainstorm ways to increase their own exploitation. But now logistics and manufacturing employers are shifting to a new model. The pandemic pushed delivery times even longer. The COVID- and climate-driven “supply chain crisis” of 2021-2022 revealed just how vulnerable to disruption JIT was and finally led businesses to reconsider some of the major aspects of lean production—above all just-in-time delivery and depending on just a single supplier. Amazon has developed a dense logistics system that maximizes the velocity at which all products move constantly within and between locations. The twin secrets to its success were a brutal labour process, in which tasks and pace are directed by algorithms, and an increasingly dense logistics system. This highly orchestrated and optimized model is now shaping logistics for the US economy as a whole. Companies like Target are following Amazon’s lead, seeking to control inventory levels and outpace their rivals by creating dense networks of facilities and adding vehicles. These regional systems are connected by railroads and interstate highways. To better coordinate them, CITI GPS reported in 2023, companies are seeking “control tower” visibility over their supply chains—intensifying the digital surveillance, routing, and tracking of goods and labour. As companies abandon lean methods in favor of digital technology, a system with more “nodes” and “links”—points of connection, transfer, or exchange that are activated by human labour both plants, warehouses, and other facilities. The exercise of positional power can put the brakes on the velocity of inventory, goods, and revenue to make strikes and work-to-rule actions more effective. The trick is to find the points of vulnerability, a task that calls for collective decision-making and coordination between workers. The reconfigured production and logistics workforce is mostly non-union, often contingent or part-time. The collective awareness and coordinated use of positional power offers a powerful alternative route—and an additional organizing tool. [784a00ee]
Retailers and logistics firms are bracing for a challenging holiday season as consumer caution and economic uncertainty loom. Worries about soft consumer spending have led retailers to place smaller orders, while major U.S. banks report no softness in consumer credit. Consumers are focusing on buying goods for personal use on Black Friday and Cyber Monday, rather than for gifting. In response to the uncertain market, logistics firms are adopting strategies to navigate the challenging landscape. Amazon, for example, plans to increase its seasonal workforce, indicating confidence in fulfilling heightened demand. The impact of the housing market on consumer goods sectors is also being noted. In this economic climate, strategic planning and consumer behavior analysis are crucial for retailers and logistics companies. [e2ba06cc]
Out-of-stock issues continue to plague the retail industry, causing frustration for both shoppers and retailers. The ability of raw materials suppliers to keep up with market demand seen by finished product manufacturers and retailers is a critical factor. Shipping costs and delays still account for key disruptions for 80% of the respondents. 74% of Americans take dietary supplements, with 55% reporting they are regular users. The dietary supplement industry provided $158 billion to the U.S. economy, up 23% from 2016. Raw material suppliers and finished product manufacturers have implemented various solutions to keep up with demand, including adding a second qualified supplier, finding a new provider of raw materials, discounting SKUs, and reformulating products. Diversifying the supply chain offers adaptability and positively impacts inventory and cost management. Transparency and sustainability initiatives are no longer a trend but rather an expectation, as consumers want to know about the environmental and ethical standards companies promote. Governments and international bodies are increasingly emphasizing Environmental, Social, and Governance (ESG) standards. Diversification and sustainability initiatives in the supply chain foster resilience and innovation for long-term success. [5c803c85]
New research from Gartner identifies access to labor as one of the top resource constraints in supply chain and procurement. The research highlights that supply chains tend to focus on urgent issues to provoke action, rather than addressing long-term constraints. Access to labor is expected to be impacted by exacerbated climate change. Gartner suggests that supply chain leaders should leverage short-term immediate business concerns to engage stakeholders and design solutions that address both current and future constraints. The three areas of action identified by Gartner for a successful supply chain strategy shift are de-prioritizing long-term constraints to motivate action, re-prioritizing long-term constraints when designing solutions, and innovating new solutions by leveraging the marketplace. By focusing on current viability concerns, industry leaders can deliver stronger results through small changes made in focused areas. [49798197]
Humanity is not wired to deal with a society of more than 150 people. To coordinate among more than eight billion people, we have built complex societal machines, but we struggle to understand and fine-tune them. The economist Dan Davies argues that our world is filled with accountability sinks, where things go wrong but no one is to blame. Social systems need to pursue their mission while also preserving themselves, performing multiple sub-tasks. Delegation, strong feedback loops, and management cybernetics are crucial for reforming organizations. However, Davies does not provide a clear answer on how to improve our understanding and control. [2f03502f]
Supply chains are a process of delivery, transportation lanes, technology outsourcing, and assembling parts across many different countries. Uganda heavily relies on global supply chains for basic goods, and any disruptions to these supply chains will result in scarcity and supply-side inflation. The future global price of microchips will determine the penetration extent of the smartphone market and other electronic products. Realigning supply chains to friendlier countries may make goods more expensive in the short term. The complex ecosystem of over 9,000 suppliers for high-end chips lacks international competition and is vulnerable. The fragility and vulnerability of extended and complex supply chains can cause the entire system to shut down. There are invisible costs associated with global supply chains. A breakdown in one part can cause the entire system to shut down. The driving force behind globalizing supply chains was to create efficiency and reduce costs. However, the hyper-vulnerability of global supply chains is a major issue. A breakdown in one part can cause the entire system to shut down. The article is written by Samuel Obedgiu, a Plant Biotechnologist and researcher. [b14b074f]