The Great Supply Chain Squeeze: How to Work Your Way Out

Calamity? Catastrophe? The “Great Supply Chain Squeeze”? What would you like to call it?   

We don’t want to set off any alarm bells. But when a spade is a spade…  

Starting in 2020, there’s been a chain of events like no other – you know what it is. A 3-year-old, globally sweeping, silent disease.  

On top of that, the global economy braces itself for the potential effects of a raging war between Russia and Ukraine.  

Supply chains have literally broken with a steep 20% drop in shipping volumes and a 30% drop in on-time delivery, according to FourKites.  

Ever Given, the colossal container, ship got stuck sideways, leading to an 11% increase in delays as far as shipments go.

And now China’s rising pandemic cases are threatening to disrupt supply chains even further.    

Did we mention the Russia-Ukraine war which threatens to send shockwaves down our way?     

The Ocean Freight Disruption

How should businesses, retailers, solution providers, governments, and everyone else who depends on the very fabric of supply chains even manage to keep the vital shipping lines from ripping themselves to shreds?  

Most retail suppliers have little control over supply chains, shipping logistics, and the global network of containers.  

Even if they do (the larger ones), they depend on multiple points of control, disconnected data systems, and decentralized management. So how do we achieve seamless data transfers and better management? 

End-to-end visibility, a way to quickly identify issues and bottlenecks, and cross-functional collaboration are the answer.  

McKinsey’s Idea; Our Real-time Solutions

McKinsey’s helpful article outlines how retailers can take steps to shock-proof their respective supply chains.   

The article points to a viable solution:   

…Only by creating a full view of the challenge and managing these disruptions across different time horizons will retail leaders prepare their supply chains to support growth in the next normal.

McKinsey likens it to implementing a massive digital control tower that connects data systems and generates insights across the end-to-end supply chain.  

We agree.   

This helps create seamless data transfer, predictive and real-time insights to help manage contingencies, transparency, and accelerated response times, once bottlenecks are identified.  

McKinsey predicts that this approach can improve fill rate by 10% and reduce excess inventory by more than 30%.  

Other suggestions include (but are not limited to):  

• Focus on efficiency   
• Diversify: remix supplier networks, geographies, locations, and existing assets 
• Enable cross-functionality: planning and execution  
• Implement effective automation of distribution networks to reduce TCO (Total Cost of Ownership) – this alone can boost profitability by 300 to 700 basis points 

A McKinsey survey concluded that supply-chain executives found that 64% of respondents consider automating warehouse roles to be the top digitization and automation priority 

It’s time to regain control.  

At Gatehouse, we enrich maritime data and enable real-time tracking with more than 300+ billion data points for infrared decision-making and improved customer service.   

Use predictability and end-to-end ocean tracking (4000+ ports, 300,000+ vessels, and more than 500,000+ containers) to reduce the impact of ever-present volatility and supply chain threats.   

From your point of view, how do you think supply chain visibility management will shape up in the near future?  

What role do you think diversifying distribution systems and vendors, geographic locations, the future of big data, and better maritime data management can have on managing constant threats to supply chains, retailers, eCommerce, and other businesses?