Short Haul Supply Chain Solutions
The COVID-19 pandemic offered business organizations great lessons in supply chain management. After the pandemic, grocery stores stared at empty shelves due to a supply chain crisis but not crop failure. The pandemic containment measures lead to the closure of industries due to snags in the supply chain and labor shortages. Port congestion and the war in Ukraine have seen the impacts of the pandemic spill to 2022. However, business organizations that have adopted short-haul supply chain solutions are overcoming the impact of disruptions in the global supply chains.
Since some commodities affected by the crisis can be stored in warehouses, these businesses apply innovative techniques to maximize storage space and minimize labor requirements. Like Winston Churchill once said, “Let our advance worrying become advance thinking and planning.” Plans, such as using plastic totes to enhance storage and automation of warehouse operations, are some innovative ways of staying ahead of the curve. This article expounds on the current supply chain crisis as well as possible solutions to the challenges.
Causes of the Current Supply Chain Crisis
Several factors lead to the disruption of the global supply chain. This disruption created an unforeseen crisis that spilled into the post-pandemic period. Here are some reasons why most parts of the world faced a shortage of essential commodities way into 2022.
Covid Generated Backlogs
Lockdowns and social distancing requirements made it almost impossible to produce and ship specific goods and meet their demand. Before vaccines were discovered and distributed to consumers, the global economy almost stalled. People could not travel to work; neither did goods reach their destination. Although the pandemic is now behind us, various industries are still dealing with pandemic-generated backlogs. These industries have to make up for the lost time before things can begin to run smoothly again.
Shortage of Workers
Before business organizations could recover from the impacts of the pandemic, they were hit by the great resignation. More than 47 million Americans voluntarily quit their jobs in 2021. The great resignation caused an unprecedented shortage of workers across industries. Transport companies could not get enough workers to meet the resurging demand for goods after the easing of pandemic restrictions. Ports and dock workers were also not available to clear the pandemic-generated backlogs.
Fuel Restrictions for Transporting Goods
Restrictions in the use of fossil fuels have also sparked a shortage of essential commodities in the market. Most transport companies relied on gasoline and diesel to ship goods from one point to another. However, the focus on green energy has seen the imposition of restrictions on fossil fuels to reduce carbon emissions. While reversing climate change through reducing emissions is an idea whose time has come, these restrictions are hurting the transport sector.
Long Haul Supply Versus Nearer to Consumer Warehousing
Long haul supply refers to moving goods for distances of 250 miles or more. Drivers in a long-haul supply arrangement do not make it back to their place of origin the same day. Near-to-consumer warehousing, on the other hand, reduces the distance required to deliver the goods to consumers. The near-to-consumer warehousing utilizes storage facilities, such as warehouses to supply goods wherever they are needed by the consumer. Through a near-to-consumer warehousing arrangement, consumers do have to wait for hours or days before their orders are delivered.
Close-to-consumer warehousing is closely related to short-haul supply chain solutions. In a short-haul supply arrangement, goods are moved within a radius of 150 miles or less. Drivers in this arrangement can make it back to the warehouse on the same day.
Fixing Supply Chain Challenges
While the shortage of commodities is partly due to crop failure, the current global shortage of goods is largely a supply chain crisis. Goods are produced on one end, but they take too long to reach the intended consumer. Fortunately, the current crisis can be fixed through short-haul supply chain solutions. These solutions include:
Storage Closer to The Customer
Closer to consumer warehousing can help solve most supply chain crises. Storing goods closer to the consumer means suppliers deliver the goods to consumers whenever they are demanded. There are several advantages of being closer to consumer warehousing;
- It reduces transportation costs. Since the goods are stored closer to the consumer, the delivery cost is usually lower. The short-haul supplies approach is applied to minimize the distance covered by the drivers to deliver their freight.
- Allows businesses to get ahead of the demand cycle. Storage closer to the customers allows business organizations to forecast the demand for specific commodities and stock them in advance. The arrangement reduces the lead time to give you a competitive advantage.
However, closer to consumer warehousing requires innovation to reduce the holding cost. Holding cost, in this case, includes all the costs related to storing inventory. Warehouse managers must come up with innovative methods of maximizing storage space and reducing labor costs.
Warehouse managers use storage containers like postal totes and innovative arrangements to maximize storage space. In addition, selecting the right containers and boxes reduce wastage and breakages. In this way, suppliers can store goods closer to the consumers at reduced costs.
Shipping to More Ports
A supply chain crisis can also be minimized by shipping to more than one port. This approach allows suppliers to overcome the port congestion challenges by utilizing less congested ports. Again, suppliers require specialized containers and boxes to reduce breakages during transit.
Automating Warehousing Operations
Supply chain crises are partly due to labor shortages. The great resignation of 2021 brought a shortage of workers in most industries. To reduce the impact of the labor shortage, business organizations can automate warehouse processes to incorporate a robotic workforce.
Global Supply Chain Visualization
Supply chain visualization refers to getting the bigger picture of the supply chain. Through the application of business intelligence tools, suppliers gain insights into the supply chain and adjust accordingly. This allows them to anticipate shortages of commodities, congestion in ports, and other forms of supply chain disruptions and move ahead of the demand cycle. Supply chain visualization also enhances transparency throughout the process to maintain flexibility for future crises.