If you are dependent on any region, non-friendly country, customer, supplier, material, or anything noteworthy to your success, you must diversify. Although this concept has always been true, the pandemic highlighted the critical importance. Some companies simply lost their source of supply overnight and have not recovered if not diversified.
According to UPS's CEO, UPS’ network flexibility gave it an edge over FedEx in landing a deal with the U.S. Postal Service. Instead of following a hub-and-spoke model to service the USPS, UPS can use its regional gateways to support the local and regional requirements of the USPS customers.
The latest Francis Scott Key Bridge collapse has caused massive diversions on the East Coast and in the Baltimore region and points out the need for backup sources of supply and agility in the supply chain.
Sales strategies and customer programs are pivotal to developing a demand plan in support of sales revenue growth goals. SIOP (Sales Inventory Operations Planning) will translate these sales forecasts into operations and supply plans for review with cross-functional teams to ensure the sales plans are fulfilled successfully and efficiently.
The supply chain is in a constant state of disruption. As we discussed on Supply Chain Chats, simple backup plans are no longer enough. In fact, you can look at recent events and determine if a backup is sufficient. Starting with the pandemic, of course, most if not all companies didn't have a sufficient enough backup plan.
According to The California Policy Center, 237 companies have left California since 2005. Most companies cited the expanding regulatory and taxation environment.
California's minimum wage went up to $20/hr. for fast food restaurants with at least 60 locations nationwide that do not make bread. This law is causing widespread unintended consequences. For example, Fosters Freeze in Lemoore closed suddenly after the wage hike. Mod 5 Pizza is closing five locations.
Horribly, a container ship collided with the Francis Scott Key Bridge, and much of the bridge collapsed. From a supply chain point of view, it has caused significant near-term impacts and extended disruptions in the region.
Manufacturers wish they left supply chain shortages behind after the pandemic, but they remain top of mind. Concerns remain. According to KPMG, “71% of global companies highlight raw material costs as their number one supply chain threat for 2023.”
Manufacturing promotes safety and security and mitigates risk. Controlling your supply chain and mitigating geopolitical risk can become paramount overnight as geopolitical events occur, natural disasters emerge, and supply chain challenges arise (strikes, disruptions, shortages).
