Note: Today’s post is part of our “Editor’s Choice” series where we highlight recent posts published by our sponsors that provide supply chain insights and advice. This article is from Longbow and looks at the ongoing labor shortage and supply chain visibility.
Over the past 20-22 months, we have experienced worldwide disruptions that have altered and influenced lifestyle changes. With COVID-19 inspired Global policies in place, day-to-day routines for industries on a global scale had to change how they operate within the supply chain sector.
The Labor Shortage Effects on Supply Chain
As the pandemic continued and Stay at Home Restrictions were established, many began to re-evaluate their careers and professional positions, which created an influx of individuals starting early retirement. With the current labor shortage, organizations are on a mass hiring spree but are facing challenges in finding, hiring, and retaining talent. Goldman Sachs researchers led by Jan Hatziusworf estimates that these trends will last well into the year (2022) as nearly 60% of the labor force will not be returning.
Some factors to consider are that individuals of working age and capability are becoming much more selective in which career path they are willing to consider/pursue. Many are finding alternative ways to make an income and establish financial stability and are choosing to stop working the traditional 9-5’s altogether. These variables, coupled with the competition from other industries like technology (remote positions have gained immense popularity) or health care, manufacturing employment has decreased nearly 400,000 from pre-pandemic levels, creating the supply chain labor shortage we are experiencing today.
Despite the Labor Shortage, Consumers Still Consume
We saw disruptions in delivering goods and merchandise worldwide, from delays like the Suez Canal obstruction, slowdowns in China, and unloading in Los Angeles. With these disruptions and the labor shortage, employers are finding that due to a lack of visibility, they are having a hard time effectively managing processes, and unloading imports, resulting in slow delivery times and shipping delays rippling across the entire supply chain. Thus, organizations have shifted to keep up with demands, leading them to re–strategize and reframe how to maximize their efficiency with their existing labor force, like adding new processes like pay for performance. However, not all organizations have implemented new software, strategies, or procedures to help increase visibility to their supply chains and deliveries, contributing to a 6.2% surge in the consumer price index.
Rise of Real-Time Visibility – A Step Towards an Intelligent Enterprise
Although organizations have solutions to manage their inventory, labor, and warehouse operations, they continue to face challenges with increased velocity, complexity, constraints, and declines in labor availability, visibility, and opportunities for efficiency gain. Other organizations look to automation and/or robotics as a solution, but these solutions are difficult to assess ROI. There are great technologies available today that help with manufacturing, but rarely do these solutions factor in inventory, labor, or storage constraints and are limited with their ability to integrate between all systems involved.
To read the full article, click HERE.