Blake Dowling: Weakest link — scarcity and breaking (supply) chains

Cargo ships entering one of the busiest ports in the world, Sing
'We are expecting things to get worse before they get better.'

Scarcity is defined as being in short supply.

Have you tried to order a computer lately?

How about a new batch custom of T-shirts for your staff or volunteers? We have an extraordinarily complex and highly technical global supply chain stretched too far. Welcome to real-world scarcity.

It’s not just tech and apparel; we all know about that. How about fuel and beef prices? Automobiles?

Look around the globe for answers, some are easy, and others are just implausible, yet very real.

Last summer, when Wuhan, China, closed, it’s easy to see the technology disruption — felt months and years down the road.

Lenovo, Dell, HP, IBM, Apple have a row of power-house manufacturing facilities in that region.

The jury is still out on when they will get caught up. We are all hearing chatter on inflation and shadow inflation, but what we are dealing with is scarcity, and never before in my life have so many things intersected to bring us to where we are today.

Goods from overseas are delayed, and that makes sense, but why U.S. beef? Panic buying throughout last year, experts say, is one reason. Meatpacking plants were also dealing with slower production simultaneously, so both items led us to where we are today.

With prices on the rise, the White House weighed with a very long report added to the mix. Another reason is that the meat industry is controlled by only a few large conglomerates.

Reading the report, there is one odd item. Paragraph four discusses the fact that four firms control 55%-85% of this industry. That is such a wide swing. That range would encompass A-F from an academic perspective. Maybe it is a typo.

Please read it here and draw your own conclusions.

How about cars? Why are used vehicles up 40%?

Slow demand last year to spiking demand this year plus (just like with computers), you have to factor in the worldwide chip shortage, too.

So, there are labor shortages, rising transportation costs, closed factories, demand up and down, pandemic panic buying.

What else?

Next, there’s fuel.

With fuel prices, you have to also factor in storms to the equation. Refineries had closures due to summer storms, adding another wrinkle to this situation.

Why again are there labor shortages? Aren’t we supposed to be rebounding from last year?

Experts say that people are reassessing their careers retiring early or collecting government dollars versus working; all this adds to the list of supply chain woes.

As Tracey Shrine, president of Tallahassee’s Full Press Apparel, explains:

“We are expecting things to get worse before they get better. Manufacturers are still trying to get caught up on the actual fabrication of raw goods into finished products, and then we are still seeing the effects of logistics problems (cargo/container shortages, truck driver shortages) that have continued to delay products getting to us for decoration. We have been advised by our suppliers that we should not anticipate an improvement, at the very earliest, until the second quarter of 2022.”

From the transportation perspective, I asked the president and CEO of the Florida Trucking Association for their thoughts.

Alix Miller shared this on scarcity:

“Few people understand how incredibly complex and fragile the supply chain is—and the inherent reliance required on all aspects of production and transportation modes. A product purchased by a consumer has been on a truck an average of four times.

“That’s a tremendous amount of labor necessary to deliver one package to your home. One small link broken in the supply chain reverberates throughout the economy.

“Let’s take pallets as an example.

“Pallets have their own supply chain production process from start to finish (lumber, processing, construction, delivery, etc.). It also requires a tremendous amount of labor and transportation.

“We’ve had a pallet shortage recently. Think about how one product, necessary to move and ship goods, affects the supply chain.

“The pallet isn’t the commodity, but it’s one small cog in the machine — and can disrupt the entire network.

“All of a sudden, your grocery store is missing bottled water because of a lumber shortage.”

Lessons from 2020 can show us the way to stability in areas where scarcity is causing so much disruption.

Patience and hard work will get us back to where we were in early 2020.

Also, when you work with small businesses in Florida; I share the words that Tracey wrote in her column: “We hope that consumers who deal with any small business during these times will show some grace and patience if they have to wait a little longer or pay a little more. I know we are.”

Wise words. Thank you, Tracey, as we are all in this one together.

Despite an endless list of barriers to success, I think we will see American know-how and innovation get us through the storm faster than experts believe.

___

Blake Dowling is CEO of Aegis Business Technologies. He is the author of the book “Professionally Distanced” and the Biz & Tech podcast host.

Blake can be reached at [email protected]. You can pick up his book here; it has sold dozens of copies worldwide and is a bestseller in Southern Ontario. Enjoy.

Blake Dowling

Blake Dowling is CEO of Aegis Business Technologies. His technology columns are published by several organizations. Contact him at [email protected] or at www.aegisbiztech.com



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