Coping with Global Supply Chain Hurdles in 2022
The COVID-19 impact ripples into the dire situation of the supply chain in the USA where, like the rest of the world, port congestion is causing disastrous effects in the form of supply-demand mismatch. This also means that prices are inflating to new heights from the suppliers. Either directly through the lead time increases or in some cases, artificial price jumps.
Our journey to understand how companies are curbing this led us to Mandeep Singh, Manager of Supply Chain and Logistics at Restoration Parts Inc. His efforts to unjumble this new world order has led him to identify key points to avoid situations way ahead in the future.
"There is no rest in the world of supply chain. If you didn't know that before, now is the time to be proactive and tapping into resources to create tier visibility for all your vendors" Mandeep emphasised.
The company, operating out of various states, was quick to identify products that could be rerouted from their original port in the west coast to now Norfolk in the east which mitigated the initial round of problems. With continuous bouts of COVID restrictions in China making it harder to work with vendors, Mandeep and his team worked tirelessly to pick and choose an expandable team of vendors in the south-easetern counterpart in India.
Another proactive measure top pundits like Singh resorted to was to tweak the reorder point levels to order more than the need, as a practice to be forward thinking. This not only increased opportunities for sales to break through the supply surge barrier but reduced reliance on other products and vendors also in the long term.
As a final measure, the team was told to produce tangible contracts to ensure the new lead times are met and contractual obligations are fulfilled. As Mandeep points out "It's very hard to enforce the timelines during these congestions. Vendors are aware of the lead times, delays and everything in between and it is best to get this in writing before going forward with the purchase order".
The plights of many like Singh are not unheard. Addressing the nation's top economic hurdle, President Joe Biden was quick to sign the Ocean Shipping Reform Act of 2022 into law last Thursday, which promises quick and sweeping changes to the burdened ocean shipping industry after around two years of port congestion, delays and rising costs.