‘There were supply chain issues before Covid-19 began,’ says Antony Francis, Supply Chain Consultant at Endava, in an exclusive video interview for The Logistics Point. Francis speaks about what went wrong, how organisations overcame their problems and what is to follow for the industry in 2022.
As Covid hit demand grew very quickly as more people turned to online shipping. That was coupled with the already existent driver shortage in many countries around the world and ports’ congestion. Despite the increased demand for specific goods, most notably around home DIY, the capacity remained unchanged and overtime led to what the industry is experiencing at the moment. How can we solve these problems?
Francis believes the problems in ports will continue throughout 2022 despite the best efforts of governments, carriers and ports. The US government decided to open ports for 24 hour operations but this will not solve the shortage of drivers which ultimately will see many of the containers still stuck. In addition, companies would be reluctant to invest and work on long-term projects during Peak Season and the preparation period before and after that. ‘There is only a certain amount of time to do things,’ Francis explains. ‘You can do some short term fixes going into 2022 but the major fixes that will help the infrastructure are longer projects and will go into 2023.’
Organisations are urged to plan in advance and Francis points at the possibility of having a lot of traditional Christmas stock in shops in February due to late arrivals. In a recent interview with The Logistics Point he also explored the need to plan Peak Season 2022 now. ‘We know we have had a crisis for the last several months,’ he comments when asked if governments should step in and help the industry. Although the problems are not new retailers are very likely to experience even more shortages. Shops around the world have fewer items on their shelves.
Large retailers have more power to weather the storm and their procurement departments have already started working on the next Peak Season. ‘Smaller companies are a little bit stuck as they have to work through forwarders and shipping companies,’ Francis says.
Predictions for 2022
Companies will need to fully analyze their ability to view their entire, global supply chain. They must have visibility of all their trading partners, including manufacturers, shippers, forwarders and others and have the connectivity to deliver real-time updates throughout the process.
In 2022 we will see a real need for supply chain technology companies to consider and provide the best platforms to achieve this. One-size-fits-all solutions might not always work across every module so we could see a trend for organizations looking to own specific spaces and provide the best solution for a particular subset of partners.
In 2022 it’s going to be important that supply chain technology companies can really provide solutions that enhance connectivity and visibility. There is a lot of work going on to ensure that systems are up to scratch, and companies that are able to provide digital acceleration solutions to enhance end-to-end visibility of the supply chain will do well.
Many companies’ technology was found wanting, even before the COVID-19 pandemic and other external factors placed further stress on supply chains. The level of connectivity and readiness was low, and companies had only really just started to look at issues such as visibility and real-time updates to shipping information. When the pandemic hit, companies were already lagging, which only increased the impact of issues arising from disruptions.
It will likely take well into the first quarter of 2023 to absorb the disruptions from 2021 and 2022. There needs to be a significant digital acceleration to make sure systems are more connected and resilient.
This will both close existing gaps and serve to manage any future, unforeseen events. Companies should insist that their shippers, forwarders, third-party logistics providers, etc. are connected in real time and able to move swiftly to react to any changes in supply. Coupling this with AI and machine learning predictive analytics to anticipate issues will go a long way to keeping supply chains running smoothly.
Watch the full video now and learn more about what are the expectations for the supply chain in 2022. ✷