Skip to main content

We are the supply chain problem.

We can’t go a day without hearing, or sharing our own story, about a seemingly simple purchase that is taking eons to arrive, an impatience that has heightened in a next-day culture.

In casual conversations we hear people cite the cause as having something to do with lazy workers, politicians, Russia’s aggression in Ukraine, or myriad other heard-then-repeated explanations.

Turns out, we are the problem: Our business models, our disconnected systems, our labor practices, our personal shopping choices. We are the forces straining the system.

That’s why this WSJ video is so fascinating. It starts with the sobering truth, that global demand is greater than what supply chains can handle. From there it unpacks the thorny thicket of disconnected problems raging through the system – i.e., through factories, ocean shipping, ports, trucking, and distribution centers – all made worse by rapid changes in DTC business models and the resulting shift in consumer shopping behavior.

And, spoiler alert, this story might not have a happy ending. Our supply chains may be forever strained without a massive rethink of how we solve – and connect– the problems.

For those of us who don't have time to binge a 54 minute video, here are some key highlights:

Supply Chains scaled down when Covid hit (e.g., capacity, inventories, labor, etc), expecting that global consumer demand would contract.  It didn’t. 

Shipping ports are a fragile point of failure.  Our ports, most notably the Port of Long Beach here in the US), represent a singular intersection of the problems spanning ocean shipping, trucking, labor and consumer demand. 

We don’t have enough truckers in the US.  Nearly 10M people have a CDL license yet only 3.5M are driving. Why? They are poorly paid (new drivers barely earn minimum wage), are seldom home, and work 14+ hour days. 

Seismic changes in consumer behavior, acclerated by eCommerce and DTC models, are further straining supply chains, which must now deliver more products to specific addresses instead of mass deliveries to fewer big box stores. And as we know, more and more consumers embraced online shopping during the pandemic 

Distribution centers experience high employee burn-out. People working at these fast-paced, always-on distribution centers experience work-related injuries at a rate that’s nearly double coal mining, construction, and most manufacturing industries. (Turnover at many of Amazon’s distribution centers exceeds 100%.) 

We have a shortage of last-mile delivery drivers.  These are the drivers that more often than not are working for delivery partners subcontracted by Amazon and others. (This is why Amazon started its own package delivery company, which will in time be the largest parcel delivery company in the US.)


Popular posts from this blog

What makes a premium brand premium?

I was thinking the other day about the DNA of premium brands . One thing is certain -- it's a relative idea. For example, Hyatt is not a premium brand if you're used to staying at a W or a Ritz Carlton. But if your vacations to date have been holed up in a Holiday Inn, then by all means a stay in a Hyatt is a premium experience. Another thing is certain -- a brand is considered premium only when we believe it is worth the price. And that's where we can dig deeper. Why are we willing to pay more for a product when there are others that provide the same service or function at a lesser price? I have spent a good part of my marketing career developing strategies and ideas for a wide range of  premium brands, including American Express, Sony, Callaway Golf, Hilton, Jaguar, Land Rover – even the Toyota Prius.  Through these experiences I have come to believe that a premium brand is built upon specific tangible and intangible attributes that give it a sense wort

Super game. Dull ads

As a passionate Giants fan it is safe to say that I had a good time yesterday. But as an advertising professional I felt a bit underwhelmed by the caliber of the advertising . Many were entertaining. But few possessed that intangible Super Bowl-ness...big, pop-cultural, fun. Even fewer seemed to have anything relevant to say about the brand, such as the Planters "uni-brow" spot. I loved the Bridgestone "screaming animals" spot, but it would have been a much better spot for the Saab featured in the spot than the tires the car rode upon. As for Bud, good spots, but I've seen the dog and horse thing before. Tide's talking stain was funny, but did it have Super Bowl-ness? My fav? The Coke "balloon float" spot. It was classic Coke (for Coke Classic). Big. Entertaining. Unexpected twist. Utterly charming. And Charlie Brown finally won something. Coke is about smiles. And that spot was just that. The Audi spot that I wrote about last week liv

Will this be your first recession rodeo?

In a previous article I referenced Mark Twain’s quote, “history doesn’t repeat itself, but it often rhymes.”    If true, then this is a poem about marketing in a recession by reflecting on lessons which I will attempt to freshen... Ok, no more poetry. I recently revisited the WikiBranding articles I wrote during the 2008-2009 meltdown that spotlighted best practices from a range of marketers.   It struck me that  those of us who guided businesses through The Great Recession can  share  lessons we learned with managers for whom this downturn might be their first.  (Bob Barrie, Stuart D’Rozario and I had just co-founded BD’M; learning how to navigate the recession was not a choice!)     Who decides if we’re in a recession?     Spoiler alert:  the consumer decides.   News stories about the economy lead us believe we’re in a recession – the “R-word” is having its moment.     Economists might say otherwise, based on their often used definition of a recession, i.e., two consecutive quarters