If there is something we have learned over the past year, it is that it doesn’t take much to upset an already distressed supply chain and push adjacent industries over the edge, even as the economy recovers. Over the past month, there have been multiple reports of inventory shortages and reductions in production across a number of sectors as companies worldwide are struggling to find raw materials, shipping containers and labor.
This is why it’s not surprising to see supply chain topics dominating the news in July. In fact, supply chain rose as a discussion topic on Big Valley’s Top Conversations in Tech list, moving to the No. 4 spot, up from No. 5 in Jun’21. The topic registered a 12% increase in coverage volume from Jun’21 (from 160,146 stories to 179,136), while year-over-year volume was up by a whopping 37% (from 131,144 stories to 179,136). Compared to Jul’19, coverage volume was up by 145% (from 72,970), showing how pandemic disruptions, fluctuations in freight capacity and demand, labor shortages and changes in consumer preferences have brought supply chains to the forefront.
Over the past month, there has been no shortage of events causing disruptions – from the closure of yet another major port in China (Ningbo) due to COVID, to the In-Fa typhoon and flooding in Europe, to labor shortages. As the cost of shipping across all modes of transportation continues to rise, companies are taking urgent measures to minimize impact to their business. A number of companies including Walmart made the decision to charter ships to ensure flow of goods particularly during the peak holiday season, while other global manufactures have reported further reductions to their global production. At the same time, consumers have started feeling the impact of these persistent disruptions with ongoing inventory shortages and prices rising by 5.4% in the month of July.
Contrary to previous years, when supply chains remained vastly on the background despite their critical role, today’s disruptions have forced every CEO to think of ways to de-risk his supply chain operations and build up safety stocks. Even consumers are now more aware of changes in supply chains, as companies have no choice but to become more transparent about the challenges they face and potential impact. This is why companies need to proactively communicate how they are implementing changes to minimize risks and weather the storm, as the industry overall is trying to take a more robust and focused action to protect supply chains.