The Horrors of the Global Supply Chain Crisis and How to do Business in the Midst of it
Updated: May 23, 2022
“We make up horrors to help us cope with the real ones.” — Stephen King
Halloween being my favorite of all holidays is just around the corner, and I’m as excited as a witch in a broom factory. But wait, I hope I’m not being a Karen… you see I’ve been wanting to get a 10-feet blow-up skeleton for my front yard to scare the hell out of this year’s trick or treaters and they’ve been out-of-stock everywhere for the last 6 weeks. Darn! My carefully planned Halloween aesthetics will have to make do with the previous year’s decorations and the squirrels favorite, pumpkin. Blame it on the global supply chain disruptions, among others.
The supply chain is how we get nearly all the stuff in our lives that we want and need. It involves the manufacturers of the products, the companies that supply materials to create them, the cargo ships, trains and trucks that deliver them, and the stores selling them. A heightened consumer demand coincided with factory shutdowns, worldwide protocols requiring social distancing, and a shortage of workers everywhere has resulted in a major disruption in the global supply chain. Even when production has increased, transit has been overwhelmed, including the docks where ships arrive and truck drivers that drive the last miles.
As of mid-October, there are 100+ container ships stuck off the coast — trying to dock and unload at the Port of Long Beach and the Port of Los Angeles. That’s over 275,000 shipping container units’ chock-full-of goods just sitting on the ships with no available docking space or storage, no resources for unloading, no dock workers, and no short/long haul truckers to move the goods to the distribution centers, retail outlets and end consumers.
Food prices have gone-up, shelves are empty, delivery times are delayed, and shipping prices have tripled in many cases. There is little to no new car inventory and well-known manufacturers and distributors can no longer guarantee an actual delivery date. There is chaos and finger pointing between the port authority, US government, truckers and crane operators. And, of course, let’s not forget the union truck and port workers as well with NO expectation of resolution or easing of this nightmare anytime before second quarter 2022.
So, what does it mean?
As a consumer — first choice goods and holiday gifts may/may not be available — or, in the best case back-ordered with no return date in sight. As a manufacturer and/or distributor — guaranteeing an on-time delivery is a joke with no measurability reliability. And, as a store owner — higher prices are to be expected and product substitutes will be the norm.
What then should I do as a small business owner?
Despite beginning a 24/7 schedule — the ports are still at a breaking point. In order to carry on with business here’s what you can do:
Be flexible. It may be a good idea to rethink your business plans. Consider investing more in inventory, look for alternative sources, and pivot to new product lines when previous ones become unavailable.
Adapt to customer preferences. Harness your data and overall trends to know what products to make available.
Plan ahead. Order what you’re certain you need earlier than you think you should. Work with suppliers more than you think you should to make sure they have continuity and backup plans.
Manage customer expectations. Remind them of the supply crisis and its impact on your inventory
Increase/hold prices. If possible, maintain price points…but not to the detriment or downfall of your business. I know it may not seem like it — but consumers do understand the situation.
In the meantime, we all have a role to play:
Don’t buy unneeded items.
Be open and consider alternative/substitute items.
Be considerate and understanding of each player in the supply chain.
Don’t be surprised with higher prices, and
Don’t complain. (unless you have a better suggestion)