Numerous factors, both visible and invisible to the retail community, are responsible for congestion in the supply chain. Mike Curtin, senior vice president of apparel and soft goods with Logility, explains what companies are doing to overcome those hurdles.
To a consumer of retail goods, congestion in the supply chain “is right in your face,” says Curtin. Empty shelves have been a sporadic result of the crisis that has hit manufacturers, distributors and retailers over the past two and a half years. Products affected have ranged from “nice-to-have,” such as luxury items, to “need-to-haves,” such as baby formula.
The front end of the problem is obvious to anyone who sees ships waiting to unload at ports, trucks lined up at unloading docks, or warehouses overstuffed with product. What consumers don’t see, says Curtin, are constraints on supply, such as shut-down factories in China, or even in entire regions, due to the COVID-19 pandemic. That’s forcing retail brand owners to seek alternative sources of manufactured goods.
Adding “salt to the wounds” is new legislation in the U.S. and elsewhere that mandates a much deeper level of traceability of imports, all the way back to the farm, mine or processing plant. Merchandisers today must prove that the goods they’re selling didn’t come from a producer using forced labor, along all tiers of the supply chain. “In a world where there’s disruption everywhere, and supply is constrained, now there’s the extra [requirement] to make sure that once we get products made, we’re able to actually sell them,” say Curtin.
How are producers coping with these new challenges? For many companies, it’s a scramble to figure it out. They’re looking for ways to address the many causes of supply chain disruption, not just from an immediate standpoint, but years in the future.
“They’re putting human infrastructure and high-level programs in place,” says Curtin, “but how they’re going to achieve that — optimize, sustain and scale — those are questions that still have to be addressed.”
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