Our topic of discussion today is the documentary Why Global Supply Chains May Never Be the Same from The Wall Street Journal. This video provides a very detailed description of the supply chain and all the steps and people it takes to get something from point A to the final destination: the customer.
It should be noted the E-commerce impact started long before the pandemic. It was identified collectively among retailers and logistics people as the Amazon Effect. The pandemic did not cause this, but it did exacerbate and accelerate it. Of course, this is all driven by our instant gratification society and Amazon promises. One of the glaring future call-outs is the impending driver shortage for both long-haul and last-mile delivery. In the video, you can see how they have incorporated robotics into the distribution hubs, however, it should be noted that long-haul and last-mile can’t be farmed out to robotics.
When I look at the video, the global supply chain reminds me of a well-operated Distribution Center. As long as both inbound and outbound work in balance, the goods flow through the Distribution Center at optimum flow. If there are issues outbound, it can hamper the receiving of goods inbound, especially if the Distribution Center is at capacity. The video calls out retailers to move manufacturing to wherever in the world labour is lowest because of inexpensive ocean shipping. I remember moving manufacturing overseas for some of the companies I worked for in the early 2000s.
But the question needs to be asked: What happens when the shipping costs make it more affordable to move the manufacturing back home. Does offshore manufacturing need to come onshore again? It was also very insightful calling out the difficulties in taking the port of entries to 24/7 container offloading. Can the rest of the recipients downstream in the supply chain go 24/7? Will the warehouses (customers) take shipments in the middle of the night?
I have invited Nunzio De Pasquale, Regional Logistics Manager for Wolseley Canada, a close friend and fellow P.Log, to join me to explore some key issues raised in the video below.