Now a month deep into 2022, many of us are wondering what the next eleven months will hold for the supply chain industry. High prices of materials like wood and steel, a complicated labor market, pandemic restrictions, transportation issues and more all pressed against one another in such a way that the world was launched into a global supply chain crisis seemingly overnight.
After living with that reality for nearly two years, many are wondering if there is an end in sight to this supply chain crisis or if we are entering a new normal.
It quickly became clear that resilient and adaptable businesses would be best positioned to survive the disruption. At Millwood, we’ve changed our sales and sourcing methods significantly to remain agile in a difficult marketplace.
Many other businesses, especially those that, like us, represent essential links on the supply chain itself, have had no choice but to do the same. Some businesses are shifting from lean warehousing, which relies on cheap shipping to get products where they need to go, to more localized strategies, keeping large quantities of products closer to the customer. This is one practice that may continue for years, depending on how the logistics industry recovers in the coming months.
Consumer demand for goods has continued to strain the supply chain, and COVID-19 has not let up on its influence. At the dawn of 2021, many hoped that impending vaccine availability would cause customers to divert some of their budget away from consumer goods and back toward activities, travel and restaurants, but variants like Omicron and Delta have complicated the return to normal public life. As a result, demand has yet to budge including the ports.
Factors leading to the supply chain crisis are so varied and complex that an across-the-board recovery is not likely in 2022. For example, prices of materials may level out at some point, but labor costs and trucking shortages may not. Adopting new technologies, applying data toward increased efficiency, collaborating across the supply chain and focusing on sustainability may be the keys to the supply chain bouncing back, but it could take a little longer than the next eleven months.