The global supply chain is facing a perfect storm of challenges, and dealing with it, according to GE CEO Larry Culp, “really is akin to playing Whac-A-Mole.” As one headache is eased, another pops up. And the current global supply chain disruptions may be sticking around longer than we might think.
Manufacturers know all the issues:
- U.S. ports are overwhelmed by staggering numbers of incoming vessels and containers.
- A lack of railcars to move cargo from the ports is adding more delays.
- Shortages of truck drivers are affecting the last mile of deliveries.
- Warehouses are full and short-staffed, affecting how merchandise is received.
- Because import freight is sitting on docks longer and warehouses receiving containers are backlogged, we’re also seeing a shortage of containers and chassis to move containers.
IndustryWeek conducted a survey of CEOs in October 2021 to identify supply chain pain points. It’s no surprise that after talent recruitment and retention, the second most-often mentioned priority relates to global supply chain disruption. It could be another 12 months before any improvements occur.
Federal Government Actions
In October, the U.S. federal government, in concert with major industry representatives, took steps to help alleviate the port problems.
- The Port of Los Angeles is joining the Port of Long Beach in doubling operational hours to 24/7. The Ports of Seattle and Tacoma are likewise expanding gate hours.
- The International Longshore and Warehouse Union, representing the stevedores, agreed to the extra shift changes.
- Six major corporations (Walmart, Home Depot, Samsung, Target, FedEx and UPS) will use the expanded off-peak hours to move cargo off the dock, freeing up dock space, by moving 3,500 containers per week during the night shifts at the two Southern California ports.
As a part of the Bipartisan Infrastructure Deal (Infrastructure Investment and Jobs Act) the government will allocate $17 billion to improve infrastructure at coastal ports, inland ports and waterways, and land ports of entry along the border. Among many other specific investments announced November 9, 2021, the Act will:
- Allow port authorities to redirect project cost savings toward tackling supply chain challenges
- Fund the Georgia Port Authority pop-up container yards project by reallocating more than $8 million
- Launch the Port Infrastructure Development Grant program to modernize ports and marine highways with more than $240 million within the next 45 days
- Identify projects for U.S. Army Corps of Engineers construction at coastal ports and inland waterways within the next 60 days with $4 billion to repair infrastructure and deepen harbors
Even with these steps, it’s going to take significant time for the economy to rebound. QAD CMO Carter Lloyds recently wrote about three major industry disruptors, starting with shipping. He also described how central bankers believe the supply chain bottlenecks will continue, pushing inflation.
Recommendations for Manufacturers
Lauren Pittelli, founder and principal of Baker Logistics Consulting Services, recently wrote an article in IndustryWeek titled, As the Port of Los Angeles Expands Hours, Nimble Suppliers Seek Workarounds. In addition to aligning imports with the new hour structure, she also suggests that manufacturers:
- Optimize inbound planning and decision-making with good data
- Communicate closely with transportation providers, supplying inbound and outbound forecasts and issuing delivery orders in advance of vessel arrival
- Coordinate actions with partners, suppliers and customers
Her recommendations align well with QAD solutions that enable digital manufacturing and integrated supplier management, including those in the areas of:
- Supplier Relationship Management
- Production Execution
- Global Trade and Transportation Execution
Supplier Relationship Management
We see it often – manufacturers managing sourcing and supplier management with spreadsheets, emails, phone calls and buyers’ memories to track hundreds of supplier details – and the inefficiencies pile up. Supplier quality, performance and development issues are rampant with manual systems.
QAD SRM (Supplier Relationship Management) removes those inefficiencies and error-prone processes by giving manufacturers and their suppliers a single point of entry that promotes real-time communication, streamlines procurement processes and reduces inbound supply risks. The solution offers features that deliver value and improve supply chain management:
- QAD Auctions tailors the auction design to the negotiation situation and awarding strategy.
- QAD Demand and Delivery ensures visibility and collaboration on inventory, schedules, orders, shipments, invoices and replenishment requirements.
- QAD Sourcing manages the electronic RFQ process with suppliers.
- QAD Supplier Management manages all supplier information to reduce discovery, onboarding and qualification cycle time.
Production Execution
Manufacturers achieve real value when they can access operational data across all information silos, to optimize production and respond when exceptions crop up. Having trustworthy operational data also results in better decision-making, improved customer satisfaction and more efficient inventory control.
QAD Production Execution delivers the operational data and production insights manufacturers need. It ties ERP and shop floor operational processes together in real time. Among its major features are:
- Optimized operator-centric interface – a highly visual, contextual and intuitive interface for automated and operator-initiated shop floor transactions.
- Comprehensive operational data capture – delivers time-stamped production order, operator and equipment events, to gain actionable analytics and respond to product traceability requirements.
- Data-driven decision-making – cross-functional awareness of active status and immediate access to order progress allows for exception management and clearer insights.
- Strategic information alignment – promotes uniform access to application data and a streamlined strategic application.
- System flexibility, integration and ease of maintenance – manufacturers can adapt to a wide variety of production environments while maintaining a standardized connection to core ERP and business systems functionality.
Global Trade and Transportation Execution
QAD Precision Global Trade and Transportation Execution (GTTE) features give manufacturers an end-to-end global solution to digitize and automate global trade logistics. It provides the means to manage the inbound and outbound flow of goods, control costs, respond to disruptions and increase ROI. The solution sets the stage for real-time collaboration and data sharing among supply chain partners and delivers access to a global carrier network. Manufacturers need 360° visibility into trade and transportation operations. QAD Precision GTTE provides that visibility and also manages global trade regulation compliance and connects to regulatory bodies and customs agencies.
Learn more about the latest QAD Adaptive ERP features for managing global supply chain disruption.
