Category: Manufacturing Best Practices

How Supply Chain Management (SCM) Been Impacted by the Shortage Economy

There has been no escaping supply chain disruptions. Manufacturers across the globe experienced a new set of challenges due labor and supply shortages.

Andrew Shoppa, a supply chain management expert, stated–that before the COVID pandemic, HNI Corporation was consistently operating around a 99% complete on-time rate for shipments from suppliers. During the organization’s lowest point in the shortage economy, they were operating at a rate of 78%, which greatly affected their ability to perform for their customers. 

However, HNI was not alone, other manufacturing leaders have experienced supply chain delays which have negatively impacted their on-time customer deliveries.

Gordon Van Champ, a seasoned supply chain leader from Chamberlain Group, found that many of their sourcing issues could be traced back to overwhelmed ports. Chamberlain had not diversified their sourcing, which put additional pressure on individual suppliers who were already overflowing with orders.

The Shortage Economy Impacts

Dealing with employment and resource shortages presents several challenges. With the current market dynamics, manufacturers have been forced to adopt processes that deal with the symptoms of shortages instead of addressing the root problem.

While there are approaches manufacturers can take to be adaptable in the face of whatever supply chain challenges will come, the reality is that many of the easy, instinctive solutions are short-sighted stop gaps. Here are a few ways manufacturers are dealing with shortage disruptions today and how they are creating sustainable strategies to build supply chain resilience.

Manufacturing Supply Chain Workflow Challenges

Deloitte and the Manufacturing Institute (MI) reported that the U.S. manufacturing industry was looking to fill half a million job openings in 2021, with expectations for that number to continue to increase. It is estimated that over 2 million of those jobs are likely to remain unfilled until at least 2030 which the study warns could damage the U.S economy by up to $1 trillion.

One top of that, LinkedIn reported a 28% turnover rate increase for manufacturing supply chain positions. With open positions that are hard to fill and existing staff feeling the burden of cognitive overload, managers are struggling to meet their goals with their existing workforce.

The global competition for supply chain talent rages on for both hourly and salaried roles alongside a once-in-a-lifetime shift in where, when, how, and why supply chain professionals work. Manufacturing companies will have to work harder to make jobs more exciting and rewarding for their employees, and to do even more to generate enthusiasm around their company’s vision and future to compete with the war on talent.  

Supply chain leaders must inspire a unique mix of frontline, hybrid, and remote workers. Discover how streaming the data manufacturing process using a human-centric work design can influence employment value propositions that retain and engage current employees, and attract and retain new ones.

Webinar Recap 

Recently, LeanDNA had the opportunity to host a discussion involving experienced manufacturing leaders from Chamberlain Group, HNI Corporation, and PSG Dover. 

The three main learning objectives covered in the Building Supply Chain Resilience Webinar included: 

1. Shortages and issues discrete manufacturers face
2. The role technology plays in addressing these challenges
3. How to utilize modernized planning and optimization tools for actionable insights

This blog serves as a resource to summarize the key takeaways from the conversation, you can also download the full webinar video for additional details on the topics discussed.