David Maloney, Editorial Director, CSCMP's Supply Chain Quarterly 00:02
The Covid-19 pandemic showed us just how vulnerable supply chains are. Today we face many threats: shipping delays; a lack of workers; failing infrastructure; transportation rates that are out of control; cybersecurity threats; and of course, a worldwide pandemic that is still very much with us. But with each of these threats come opportunities.
Welcome to this limited podcast series from CSCMP's Supply Chain Quarterly, the Top 10 Supply Chain Threats. This podcast is sponsored by Ryder, the only fully integrated logistics and transportation provider in the industry. Ryder's solutions cover the entire supply chain, including warehousing, transportation logistics, e-commerce fulfillment, and last mile. Discover how Ryder can make you Ever Better at Ryder.com.
Today, we focus on supply and component shortages. Here is your moderator for this segment, Supply Chain Quarterly's executive editor, Susan Lacefield.
Susan Lacefield, Executive Editor, Supply Chain Quarterly 01:13
Hello, and thank you for joining us to the latest episode of 10 threats to supply chains. Today we are speaking on the subject of supply and components shortages, which we are seeing in everything from semiconductors to paper to youth-soccer shin guards. And today we are speaking with David Shillingford, who is the chief strategy officer at Everstream Analytics. David, do you want to explain briefly for our listeners who are not familiar with Everstream what you guys do?
David Shillingford, Chief Strategy Officer, Everstream Analytics 01:43
Sure, yeah, happy to. Great to be here. Everstream Analytics helps companies get visibility to risk across their end-to-end supply chain so that they can plan and execute ahead of and around risk.
Susan Lacefield, Executive Editor, Supply Chain Quarterly 01:58
One of the big risks we are seeing right now are supply shortages. What are some of the biggest supply and component shortages that are out there right now or looming on the horizon that our listeners need to be aware of?
David Shillingford, Chief Strategy Officer, Everstream Analytics 02:09
Well, it's, I mean, it's across the board, because a lot of the shortages relate to raw materials and inputs higher up in people's supply chains, so that tends to have an impact on a much wider group of commodities and companies. Where we're seeing disruptions that are more at the component level—chips, semiconductor chips being the obvious example—that's having a bigger impact on downstream manufacturing and ultimately, availability for consumers. So, everything's impacted, but certainly anything with a chip in it at the moment is, is a big challenge.
Susan Lacefield, Executive Editor, Supply Chain Quarterly 02:47
Great. So do all these supply shortages have the same root cause? Is it all connected to the pandemic, or are there other factors at here at play?
David Shillingford, Chief Strategy Officer, Everstream Analytics 02:58
So, they are all certainly connected to the pandemic, but there are also other factors at play in every case, and how the pandemic impacts a particular part of somebody's supply chain and what other factors are in play is going to vary a little bit from industry to industry and geography to geography.
Susan Lacefield, Executive Editor, Supply Chain Quarterly 03:22
That makes a lot of sense. Are these supply chains shortages that we are seeing, is this a temporary phenomenon are we are in for the long haul here?
David Shillingford, Chief Strategy Officer, Everstream Analytics 03:32
Well, it's a bit of both. There are certainly some things that we see getting better in the near term, but there are other things—logistics capacity is a big debate at the moment as to how that imbalance between supply and demand is or isn't going to get better in the near term. And because of the number of different parts of the logistics supply chain that are impacted, that is likely to go on into 2022—potentially through 2022. Anything that is impacted by the pandemic is going to continue at least through 2022. It should, in most cases, get better, but the pandemic will certainly be still with us in certain respects. And even if the pandemic is well under control, it can take a fairly small outbreak, as we saw at the ports in China to have a very big impact on supply chains. A very, very small number of people were infected, [an] entire port is closed down, third largest in the world. That's a big supply chain disruption, and we'll continue seeing that.
Susan Lacefield, Executive Editor, Supply Chain Quarterly 04:43
It was like the butterfly effect...
David Shillingford, Chief Strategy Officer, Everstream Analytics 04:44
Exactly.
Susan Lacefield, Executive Editor, Supply Chain Quarterly 04:45
demonstrated live. What are some actions that companies can do? Is there any—do you just have to ride it out, or can you make changes to better handle it?
David Shillingford, Chief Strategy Officer, Everstream Analytics 04:56
I mean, there's certainly an element of riding it out, because there are some things that have happened and it's difficult to change. It takes time to change, things like building up chip manufacturing capacity—that takes time. But there are tons of things that companies can do, and most of them relate to understanding where they can take action. It's very important to work out where action can be taken and where action isn't going to have a big impact on the outcome, and that really has to start with data. And that really falls into two categories. One is data about your supply chain, or your extended supply chain: What is where? What is the situation? And the other side of it is looking at risk, and how risk is today and how risk is changing over time. And it's [in] bringing those two sets of data together that companies who've been doing that for years have clearly had a competitive advantage in the last 18 months. And almost all companies we speak to now are working out how can they do that? How can they get visibility to their end-to-end supply chain—specific assets within it, shipments moving through it—and what risks are there now and in a week and in a month and in a year, or even five years? A lot of companies are now very concerned about the impact that the climate, and the changing climate is going to have on their supply chains, and it's certainly happening today, and is going to get worse over time.
Susan Lacefield, Executive Editor, Supply Chain Quarterly 06:33
Right. And I think one of the things about climate and affecting supply is, it's shifting where these weather events are happening, so it can be you can get a weather event affecting your supply chain in a spot that you were not seeing it previously.
David Shillingford, Chief Strategy Officer, Everstream Analytics 06:47
Yeah, exactly. The volatility we're seeing around climate and, in turn, weather is creating challenges with those types of anomalies, and some of them are "we've never seen this here before." In other cases, we've seen it before, but it's just much more extreme, and there can be a tipping point with certain risks, where something that's bad is survivable or is something that gets over a certain point. And heat is a very good example, whether it's refrigerating a warehouse or a truck, or the safety of a workforce or water availability, if heat is getting, the planet is getting hotter and hotter, that's an existential threat for a lot of a lot of supply chains.
Susan Lacefield, Executive Editor, Supply Chain Quarterly 07:36
Yes. Well, David, thank you for meeting with us today. This has been a great discussion, and I hope we meet with you again soon.
David Shillingford, Chief Strategy Officer, Everstream Analytics 07:43
Very good. Thank you very much, Susan. It's great.
David Maloney, Editorial Director, CSCMP's Supply Chain Quarterly 07:46
Thank you for joining us for this podcast from CSCMP's Supply Chain Quarterly, the Top 10 Supply Chain Threats. We encourage you to subscribe wherever you get your podcasts.