In the face of unprecedented challenges, the global supply chain and logistics industry has demonstrated remarkable resilience and adaptability. The Great Recession served as a catalyst for optimization and efficiency in the sector. More recently, challenges like COVID-19, weather disasters, and labor shortages have further tested its mettle — underscoring the need for innovative strategies to not just survive but thrive.
Three key elements have emerged as the linchpins of these strategies: people, process, and technology. Together, they form the backbone of a resilient supply chain capable of weathering the storm of disruptions and forging the path to a more efficient, robust logistics landscape.
In the logistics sector, skilled teams of talented individuals make strategic operations possible. Without them, it's akin to playing a man down on the pitch. However, there is a pressing need to secure adequate funding for the logistics function and staff organizations appropriately.
Burnout among logistics professionals has become a significant issue working against this mandate. Unlike their counterparts in other industries, most logistics professionals did not have the option of working from home during the pandemic. They were needed more than ever in the field to ensure critical goods and parts made it to their destination. This increased strain has led to serious understaffing, further exacerbated by longtime professionals — such as truck drivers and air traffic controllers — aging out of the industry.
Air traffic control is one area where this issue is particularly evident. Since 2012, the number of U.S. air traffic controllers has decreased 10%, coinciding with a 25% increase in narrowly avoided accidents at the country's airports. According to the New York Times, only three out of 313 air traffic facilities in the U.S. were fully staffed as of May 2023, a statistic that highlights the urgent need for action. When logistics organizations like these are understaffed, safety concerns understandably override any other priorities. Innovation, creativity, and efficiency improvements can’t happen when you’re in the game a player down.
Addressing these labor challenges requires engaging with young professionals and attracting them to the logistics field. While automation offers potential solutions to the understaffing problem, it is not yet advanced enough to fulfill the industry's crucial roles.
Our focus should be on investing in human talent, not just technology, to innovate and evolve. This includes developing training programs, providing competitive benefits, and fostering a positive work environment with effective management to keep current employees satisfied and reduce turnover. By prioritizing the well-being and development of their employees, supply chain and logistics leaders can ensure a well-staffed, efficient, and innovative future for our industry.
Processes: The Wheel Steering the Ship
Optimized, uniform processes act as the helm of the supply chain ship, controlling its course and maintaining stability amidst turbulence. These processes are the backbone of operations, helping to achieve organizational goals by fostering reliability and predictability. The key to harnessing the full potential of these processes lies in clear communication and training to ensure every employee understands and follows these standardized protocols. It's about creating a tried-and-true system that everyone can lean on, knowing that it will guide them in their daily tasks.
One of the key elements of standardized processes is real-time data and visibility. This allows for accurate tracking of shipments and provides crucial information for decision-making. In fact, a 2022 survey of supply chain decision-makers by Jabil and IndustryWeek showed that nearly half of supply chain decision-makers have adopted third-party tools to enhance their logistics processes with real-time data.
A logistics-as-a-service partner can further augment these efforts, offering technology and expertise to bolster in-house supply chain teams. Partners can also assist with continuous improvement. Once a process is in place, it can be continually evaluated and refined. This means that over time, these processes get even better, becoming more efficient and adaptable to disruption and change.
Technology: The Engine Powering the Voyage
To continue our metaphor, technology is the engine that powers the supply chain ship — propelling it forward even in the face of strong headwinds. From implementing transportation and warehouse management systems to deploying predictive analytics for route optimization and accurate forecasting, technology empowers the people and processes that make optimized supply chains possible.
Pandemic-era disruptions accelerated the trend of using logistics visibility solutions that integrate seamlessly with existing supply chain systems. These solutions allow comprehensive tracking of shipments across various transportation modes and are gaining traction across the industry, with 72% of respondents in the Jabil and IndustryWeek survey showing interest in adopting a track-and-trace solution within the next five years.
Automation is also growing in prominence for logistics applications, with warehouses increasingly deploying robots to do repetitive tasks like picking and packing. Similarly, ports are starting to invest in automated technologies to address labor shortages and improve the efficiency of operations. However, this transition is still in its early stages; only 4% of global container capacity is currently automated.
Before embarking on digitization, it's prudent for supply chain organizations to analyze their pain points to determine where these technologies can offer the most benefit. This pragmatic approach ensures that the adoption of new technologies aligns with the specific needs and challenges of each company, paving the way for a resilient and efficient supply chain.
In the face of persistent challenges, the global supply chain and logistics industry is charting an ambitious course through turbulent waters. By focusing on people, processes, and technology, organizations can build a resilient ship capable of weathering any storm.
