Global supply chain disruption and destruction have been widely covered here in the U.S., obviously chilling retail C-suites to the bone. However, as it gets increasingly worse by the day, exacerbated by the looming Holiday season, none of the coverage is redundant. It’s going to get worse before it gets better. Global supply chains are not built for this disruption. Everything is breaking down.
Each day, the broken supply chain portends lumps of coal, as opposed to toys, frocks, and “all of those wonderful things.” Because of the horrific rising costs up and down the supply chain, price hikes promise to be equally horrific. In turn, this dual slam on retailers’ top and bottom lines will undoubtedly drive many smaller businesses to close shop.
The giants with deeper pockets may be able to eat the costs and maintain reasonable pricing for consumers. Either way, both top, and bottom lines will take big hits. The China “shop floor,” Vietnam, Bangladesh, and others, had no idea when or how hard Covid would attack their factories and ports. They also couldn’t anticipate the early, large orders from retailers anticipating a huge pent-up shopping demand heading into the Holidays. So, as the pandemic forced closures of factories and caused a shortage in port workers, it cascaded into an enormous slowdown in the production and shipping sources in the supply chain. And finally, as supply diminished and shipping was delayed, factories defaulted on meeting the demand surge. As a result, supply chain costs and the price of doing business had no limits. You know where this train wreck is headed. And we haven’t even touched on the out-of-control costs at the receiving end.
The strains on supply chains for the textile and apparel industries are getting more intense. SCM (Supply Chain Management) requires coping with the supply chain challenges and should be clearer than ever. In a nutshell:
• Customer service remains at the center of supply chain management.• Control costs.• Manage planning and risk.• Manage the supplier/partner relationship.• Talent is critical!
Having said this, as an industry we can move towards solutions in mutual efforts and consensus with the assistance of political leaders, manufacturers, logistic players, unions, NGOs such as industry associations in their important role as facilitators and, last but not least, the media.
The time has come for strong plans and constant measuring for weak supply chain links.