Supply Chain Bottlenecks Creating New “Logistical Hotspots”
18 Oct 2021
Most businesses have not escaped supply chain challenges over the previous 12 months. When everyone expected COVID-19 to slow demand, it accelerated demand to a point where supply chains were stretched to their limits. But it not just COVID — the winter storm of 2021 reduced Texas’ capacity to refine petroleum, which created a ripple effect for a reduced ability to manufacture nearly all paints. Major manufacturers of cushion foam were also hit by a hurricane, causing multiple industries to temporarily shut down for repairs, which has exacerbated the shortage due to high demand. Currently, many companies, both large and small, continue to have threats of shortages or product delivery delays. The point to understand is while one event can cause a shortage, multiple events can cripple a supple chain.
Industry and retailers alike are having to throw out the old and embrace new strategies to keep their supply chain from completely failing. Supply chains had been operating digitally for several years but were starting the process of using block chain, artificial intelligence (AI), and the Internet of Things (IoT) to help keep the process moving ever more smoothly. No one expected how quickly COVID and a series of weather events would accelerate the digital transformation and turn the “just-in-time” model upside down.