Panel: Supply-chain issues will get worse

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Supply-chain headaches are only expected to get worse as inventories dwindle and logistic challenges swell.

That’s the consensus of a panel of supply-chain experts who predicted US businesses can expect a grim future. The panel, hosted by Bank of America, agreed US businesses are now seeing “first-mile” problems sending ripples though key systems and will likely get worse over the next six months.

Inventory levels

While high inventory levels have buffered businesses so far, expect to see “first-mile” issues – unloading containers, transportation bookings – to weaken the chain supply system during at a vital time for commerce.

Christmas for retail will very much be about empty shelves,” warned Lora Cecere, CEO of Supply Chain Insights.

Warehouse automation

Berkshire Grey’s CEO Tom Wagner, said that before Covid, warehouse and logistic automation and software were strong, but the pandemic has increased online shipping and staffing challenges have tested those systems. 

In addition to cost savings, companies are now looking for automation and robotics solutions to increase speed and capacity and reduce labor needs, he said.

Smarter supply chain

In the past, firms relied on a procurement-driven strategies to decrease costs leading to a fixed supply chain with a low level of responsiveness.

However, Cecere said, there’s the “greatest needs for change” in three areas. The first is the supply chain network design, second is supplier communication, and finally, supply chain visibility.

Michael Farlekas, CEO of E2open, predicts senior executives will focus more attention on supply chains for “resiliency and diversity.”

“This is likely to drive firms to pursue multi-year upgrades of legacy systems, often 10-15 years old, of supply-chain software,” he said.

Cross function

A constant theme during the presentation was the challenges businesses face in adopting to industrial software and automation. The group agreed supply chains have numerous organisational functions – procurement, operations, engineering, IT, finance – posing problems for cohesive interaction. 

Given the myriad of current supply chain issues, Farlekas “sees CEOs or COOs cutting through these silos to drive enterprise-wide change and adoption of new technologies.

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