Keep On Truckin': Searching for Supply Chain Solutions
The current state of the nation’s supply chain isn’t quite Dante’s nine circles of hell, but those on the front lines say that when a solution to a problem is developed, it can often be stalled by other issues that relate to the movement of goods across the continent.
For example, many retailers and product suppliers today are working to shorten the distance between the nation’s larger ports and distribution centers and are willing to invest in constructing new warehouses. A commendable idea for sure.
The problem? Limited availability of construction materials along with a shortage of labor to build the new structure. Frustrating, indeed.
“We have put up a lot of warehouses for companies that are looking to offset the supply chain challenges they are facing,” said Norm Brouillette, a Senior Vice President with Ryder Supply Chain Solutions. “These new facilities are being built by those looking to enhance just-in-time delivery, or bring products to market faster.”
The challenge?
“Availability with the domestic supply of building materials, roofing and steel,” Brouillette added. “It used to take six to nine months to construct a new warehouse. Now that timeline may be as long as 12 months.”
From a geographic standpoint, companies are putting more focus on the East Coast to offset the long-standing congestion that impacts West Coast ports, most notably in Southern California. Ports in New Jersey and Savannah, Ga., are seeing greater activity and as a result the demand for new warehouses in the Ohio Valley and Pennsylvania are in greater demand.
“Retailers and suppliers are looking for locations that put their products closer to the end consumer,” Brouillette said. “This shortens the delivery window.”
If there is a silver lining to the supply chain challenges facing all segments, it is the work many are doing to develop solutions. Being nimble may be the best way to handle issues short term, but the ideas are out there and new methods may serve to streamline the movement of goods in years to come when things, hopefully, return to a level of normalcy.
“There’s definitely no shortage of ideas,” said Jonathan Parks, Senior Vice President, Supply Chain at iGPS Logistics. “It’s important to take inventory of your successes related to supply chain and look at the opportunities to improve how you move products.”
Improved Communication
A number of supply chain experts who spoke with Store Brands said the need to share information is perhaps as great as any moment in recent years. While there is an understanding that many companies are reluctant to pull back the curtain on their operations, doing so may lead to additional solutions that offer quicker delivery and possibly some cost savings.
As Parks noted, one pet foods company will not want to share information with a direct competitor, but sharing information with a shipping partner may allow for development of new ideas related to the movement of products.
“Given the nature of what we’re all facing right now, it makes sense to share some data. This could lead to solutions that could benefit everyone,” he added. Brouillette said he encourages his customers to be as transparent as possible, which provides him the opportunity to identify challenges and develop answers pertaining to the particular problem being addressed.
Cheryl Henry, Vice President of National Accounts with CHEP USA, said the challenges over the past two-plus years have forced all parties involved in supply chain to constantly evolve and seek out more effective and productive ways of doing business.
“Manufacturers got creative in how they sourced and produced products, like partnering with new suppliers or creating new more self-contained production sites that limit disruptions or rationalized product SKUs,” she said. “Retailers delivered items in ways that were new for them, such as fast-tracking consumer options buy online, pick-up in store or curbside pickup.”
New Technologies
As is commonplace today, technology is playing a major role in curing what ails the nation’s supply chain. Experts note that in recent years, a growing number of companies have become more technologically savvy in how they track the movement of goods.
This has been a major asset when it comes to having proper staffing at times when the highest volume of products are moving through warehouses and distribution centers. In fact, a recent survey of supply chain executives by Carl Marks Advisors found that 39% of respondents reported investing in new technology as a way of overcoming supply chain challenges.
Availability of labor continues to be a major issue for a number of industries, including supply chain, and robotic technology combined with automation is providing not only a solution for now, but also a possible long-term answer that ultimately could offer cost savings.
“We’re seeing a growing use of robotic technology such as forklifts, which diminishes the need for manual labor,” Brouillette said. “The big benefit here is that the robots don’t get sick and don’t take days off.”
New technologies are also finding their way into the hands of those responsible for product delivery from retail stores or micro fulfillment centers (MFC) to the consumer. The continued growing demand from shoppers for same-day or next-day delivery is driving the need for companies to be open to new solutions that streamline this process.
Dana Krug, Senior Vice President for Phononic, noted his company has responded to this need with the development of the actively-cooled freezer and refrigerator tote, a product aimed at same day delivery or store pickup of groceries. The tote features solid state cooling technology that cools without the use of refrigerants by using the thermodynamic power of phonons, which are particles working at a subatomic scale.
“We wanted to develop a product that allows those working in MFCs or in stores the ability to minimize the amount of times employees touch products,” said Krug. “Eliminating a few minutes per order can save a great deal of time each day and make the process of delivering products to consumers more efficient.”
As an example, the totes can be utilized as part of a retailer’s buy online pickup in-store (BOPIS) solution for shoppers. The challenge for store personnel gathering items for a grocery order is to gather and house various products that are shelf stable or need refrigeration.
The tote stores frozen and refrigerated foods and can be placed on the shelf next to other products. This keeps a customer’s order together in one spot and reduces the time needed to bring the order to the shopper when they arrive.
“We’ve all seen store personnel running from the shelf to a large refrigerated unit to get the products needing cold storage,” Krug said. “Our totes eliminate the need to do that.”
Finding ways to shed a few pounds when loading a truck also helps with the flow of products. The plastic pallets offered by iGPS are lighter in weight than their wood competitors, which provides shippers an opportunity to ship a larger quantity of goods.
“Our pallets can save 10-15 pounds per pallet, which could be as much as 400 pounds on one truck load,” Parks said. “This allows for more items to be placed on a truck.”
CHEP’s Henry noted that her company has continued to invest in automation and improving internal processes, an effort that started prior to the pandemic.
“Part of this involves using AI technology to improve our response time to marketplace shifts and deploy the right resources and assets to serve our customers’ most immediate needs,” she said. “Our growing work with pallet digitization has enabled us to better track and understand the journeys of our assets and our customers’ assets. This helps us all to optimize supply chain controls and drive greater efficiencies.”
The Future
While many within the world of supply chain have long understood its fragility, the COVID-19 pandemic further raised awareness of how difficult it is to move goods from ports to warehouses, then to retailers and ultimately to the homes of consumers. A louder chorus of voices are now asking what needs to be done to help offset the next major issues that impacts that movement of products from coast to coast.
“A big part of this is making sure to have all the right stakeholders in one room, which is a role the federal government can play,” said Jonathan Gold, Vice President of Supply Chain and Customs Policy for the National Retail Federation. “There needs to be an honest discussion about what we need to do to make our supply chain more resilient.”
One issue raised by Gold is the current shortage of truck drivers. According to the American Trucking Associations (ATA), trucks move about 72.5% of the nation’s freight by weight. In 2020, there were 3.36 million truck drivers employed, down 6.8% from 2019.
“It’s vital for the trucking industry to attract and retain talent,” he said. Recent legislation could help increase the number of employed truck drivers. As part of the Infrastructure Investment and Jobs Act, the Federal Motor Carrier Safety Administration (FMCSA) was required to establish the Safe Driver Apprenticeship Pilot Program (SDAP), which would allow drivers between the ages of 18-20 with an intrastate commercial driver’s license (CDL) to operate interstate commerce under very specific conditions.
Prior, those under the age of 21 with a CDL were prohibited from driving state to state. iGPS’s Parks reiterated his thoughts about information sharing to help address the many issues that are facing the trucking industry.
“Take a look at how many empty miles are being driven,” he said. “The more information we have when making decisions about the movement of goods, we may be able to alleviate the constant need for drivers and chassis.”
Henry feels improvements to the nation’s supply chain will be done through a collaborative effort.
“It will be crucial to come together as supply chain professionals to ensure we leverage our learnings and implement more efficient, sustainable processes to mitigate sudden disruptions,” she said.
And Ryder’s Brouillette echoed Parks, touting the need for greater transparency.
“I say this to customers all the time,” he said. “The more transparent they are with me, the better we are able to develop solutions to their problems and maybe be able to drive costs down. If they hold their information close to the vest, we’re unable to know exactly what their issues are. It’s important to remember that logistics is a world that’s ever evolving.”