I’m Sorry, We are having supply chain issues!
Chances are you’ve heard this if you’ve been out shopping or traveling anywhere within the last 12 to 18 months.
Whether you overhead some frustrated employee explaining to the even more frustrated customer or you were in the unlucky positive of being one of the former individuals, you understand that this old term that you never really understood, supply chain, is causing a lot of headaches.
What is causing this supply chain issue that is rippling through the planet and disrupting business, profits, lives, and economies?
Great question! That’s why you’re reading this.
The purpose of this blog is to explain as simply as possible, I’ll try to do it in under 5 minutes, what is causing supply chain challenges that’s being felt around the globe and across almost every industry you can think of, especially the manufacturing of anything that involves electronic components, which by the way is surprisingly almost everything.
Even attempting to test drive a vehicle can be surprisingly difficult when the dealership can’t receive the current year models in because they are waiting on chips.
So let’s jump in.
Reasons consumers are feeling the supply chain squeeze
Shortages
This means reduced availability of products, raw material, and most heavily felt….labor! As automated as we are in the developed world we still need people to make the economy keep running smoothly. And my mom was worried when the auto checkout showed up because it was going to take peoples jobs away and ruin the economy, smh. Think about how Tesla could revolutionize the logistics industry if trucking was automated, but that’s another blog post! Anyway…
Lead-time Increases
This is a byproduct of shortages. The longer it takes manufacturers to get goods and turn out finished products and services, the longer it takes the consumers to get what they needed yesterday.
Think about being a kid and jerking a chain or rope to watch the wave flow down. Same principle. This is the ripple effect in supply chain and hence the word chain, it’s all linked together.
So……What are some of the contributing factors to the above reasons? Glad you asked! I’ll shoot them out quickly:
Popular Ports responsible for a large % of US imports can’t process imported goods quick enough.
Why? Because of a shortage of workers willing to process goods.
Also, not enough truckers in the logistics industry to move goods from those ports to distribution centers.
In result, causing cargo ships to spend extended periods of time out at sea.
Causing manufacturing companies to increase transportation cost and look for faster and more expensive methods.
Which then increases cost that is reflected in higher prices passed to the consumer, you and I.
So maybe that was a little longer than 5 minutes but it’s all relative right?
Let me know your thoughts or if there is some important disrupters that are contributing to the supply chain challenges that I left out. Also, if there are some supply chain topics you’d like me to blog about feel free to let me know!
