25 Jun 2024

Nazdar blog on Logistics: How to overcome shortages?

Supply chains are better today because companies have learned the value of open communication with their suppliers.

It is well known that supply chains have been a challenge of late due to multiple factors. In the following blog, Judy Heft, Supply Chain Director at Nazdar, explains how the company successfully adapted its operations to overcome these testing times. She says:

“Supply chain” is a term many had never heard of until just a few years ago. It creates a mental picture of how information and products flow between suppliers, companies, and their subsequent customers. Each link in the chain is one company’s supplier and simultaneously another company’s customer – from raw material producer to the finished product consumer.

In addition to understanding the meaning of supply chain, people everywhere discovered historical coping methods that successfully functioned during challenges in the past but now struggle in the new reality. While a majority of businesses tightened their belts as they had previously, markets everywhere pivoted and rebounded faster than anyone could have imagined – deviating from past results. The new demand outpaced normal supply levels, especially anything restricted. In many cases, when inventory did arrive, it arrived too late because the market had pivoted again.

The challenges we all faced were not the result of any one problem but rather a whole mess (truly appropriate word) of issues: COVID, geopolitics, weather, logistics, and labor. The issues impacted the availability and transportation of raw materials and finished goods, including the boxes and skids they shipped in.

Unfortunately, over the past two years, we have all learned that our supply chains are not neat and linear; in fact, most look more like a chain link fence where many components are interwoven across many products, suppliers, and customers. If one or two chains are broken, the entire structure is compromised: the more broken chains, the weaker the fence.

 

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Nazdar SourceOne was not immune to these challenges. Products were stuck at ports; containers weren’t available to package products in; suppliers couldn’t tell us if something was going to ship until a truck showed up to take it. All of this meant we were not able to tell our customers when we would be able to fulfill their orders.

As such, Nazdar SourceOne got creative along with supply chain professionals everywhere. Communication with suppliers was invaluable in working through (or around) problems. Products were shipped in smaller quantities to help shorten lead times. Multiple ship methods were used so that even if one method was delayed, another would come through. Different packaging or units of measure were often acceptable.

These same approaches were appropriate for customers too. Are there alternate sizes that could suffice? Is that quantity of product needed all at one time? Or, as a last resort, is there an alternative product that will work? We quickly learned that it was necessary to be creative with all our products, not just high-profile ones. If even the smallest component was not available, the entire finished product could not be completed.

Without a doubt, the current state of the global supply chain is better than it was a year or even six months ago. However, just because things are better doesn’t mean the problems are gone, and everything is back to normal. On the contrary, many challenges still keep us on our toes every day: weather from droughts to floods, labor shortages, and strikes, and who knows what else is coming tomorrow?

The only thing that can be expected is the unexpected. Supply chains are better today because companies have learned the value of open communication with their suppliers and customers and the impact that being creative together can have.

In closing, I will return to the metaphor of the chain link fence to represent our supply chain. I view managing Nazdar SourceOne’s supply chain as the chain link fence not only because all suppliers and customers are interwoven but because we are all linked arm-in-arm, just like in the fence. We work together to create solutions. Business relationships that are made and strengthened during good times help make the challenging times more manageable.

Open communications about anticipated needs, and being cooperative to develop creative solutions, will help us withstand whatever following challenges we face – and thrive. Remember to be gracious to your suppliers and those you are supplying because together, we will create the best version of our new normal.

Authored by Judy Heft, Supply Chain Director at Nazdar.

To read additional recent news from Nazdar, click here

 

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