Due to the explosion of e-commerce, the global pandemic, shifting customer expectations, and other market factors, omnichannel distribution strategies have quickly become the norm in supply chain management. As a result, it’s getting more attention than ever from the highest levels of organizational leadership.
In our latest Delivering Ideas webinar, U.S. Xpress President and CEO Eric Fuller, former President and CEO of FedEx Freight, Mike Ducker, and Tractor Supply Company’s Chief Supply Chain Officer Colin Yankee got together to share their perspectives on the ever-evolving topic.
Here’s what you missed:
How has supply chain management changed over the years?
The concept of supply chain is nothing new. It dates back to the early 1900s. In the past, it was all about productivity and efficiency of manufacturing. Now it has taken off, transforming into a complex discipline to be closely managed. But, at its essence, supply chain management’s goal will always be to balance supply and demand based on the needs and expectations of an end customer. To this day, anyone working in supply chain management has one goal – to create a great experience for the end customer at the lowest possible cost.
Where are we in the industry today?
Due to the COVID pandemic and other factors, the last 12-18 months have been incredibly volatile from a carrier perspective. For example:
- During the heart of the pandemic, many carriers, particularly smaller ones, couldn’t afford to buy additional equipment. Now, with huge surges in freight, carriers of all sizes are trying to get their hands on trucks. Manufacturing can’t keep up, so we’re seeing a major backlog, struggling to find new equipment to add to fleets.
- Government stimulus checks are causing a huge boost in demand, particularly in e-commerce.
- The ongoing driver shortage is making it difficult to meet that demand. Requirements around the Drug & Alcohol Clearinghouse alone have taken about 80,000 drivers out of the market. In addition, the pandemic caused many CDL schools to close or operate at a limited capacity, resulting in well over 100,000 fewer CDLs administered in 2020. Paired with stimulus bills that have made it possible for many drivers to avoid looking for employment, the driver shortage continued to worsen. In fact, after the May stimulus check, Google saw the lowest number of searches for trucking jobs in 10 to 15 years.
What changes can we expect to see in supply chain management?
New systems and processes, particularly around the blending of online and brick-and-mortar retail, have continued to change customer expectations. The supply chain must evolve at the same rate. That means digitizing, automating, and increasing speed and efficiency are more important than ever. All of that takes more than a supply chain management team. It takes teams from all disciplines working together to meet customer requirements.
Industry wide, all three panelists expect to see an incredible amount of innovation and technology implemented over the next few years, including the adoption of autonomous trucking. For U.S. Xpress, innovation includes the recent launch of both asset-based and brokerage business models to help continue growing and scaling the business.
How has the pandemic changed supply chain management?
Before the pandemic, there were always natural shifts in supply and demand. But they were usually predictable. Most of us have never lived through such an uncertain time, so the comfort of predictability quickly went out the window. Everyone was forced to act either proactively or reactively to an extremely volatile marketplace, somewhat blindly. We ended up seeing a shift of money spent on services and experiences to primarily online retail due to both stimulus checks and social distancing.
With asset and driver shortages (among other factors), every shift we see is amplified. There’s simply no room to make up for disruptions. We have to come together, focus on agility, and balance risk mitigation to rebuild supplies to meet the rising sales levels.
Why has supply chain management become such a focus for organizational leaders?
It’s incredible to see how supply chain management has gone from something no one has heard of to something on everyone’s mind. More and more leaders are discovering that all roads lead to supply chain, particularly because of all the recent disruption in the industry and increased multi-disciplinary digitization. Supply chain management has to be a part of everyone’s strategy.
Where does technology fit into supply chain management?
As the panelists continued to emphasize, all roads lead to supply chain management. But all supply chain roads lead to technology. And at its core is actionable data. To find the right technologies to drive your business, you first must obtain good data, partner with the right people to share data, and work together to find insights and solutions.
The more actionable data you gather, the closer you get to predictive analytics – the one thing we’re all striving for, as it can both lower costs and increase performance.
What long-lasting effects do you think the pandemic will have on supply chain management?
Though it was difficult maneuvering such a volatile marketplace, the pandemic has made supply chain management more resilient than ever and moved us to a new level of competence. The experience we all have now taught us to manage risk, know what data we need, react to issues, and so much more.
It also sped up the adoption of technology in many ways. Acceptance was slow before, but now everyone is seeing the importance of innovation and building out technology as a necessity, not as a plus-up. Expectations have changed when it comes to technology, and businesses are forced to keep up.
Thanks to everyone who joined us for the webinar. Our next one will be in June. And it’s all about Road Safety. Be sure to check out our LinkedIn page as we finalize details.