March 18, 2021
Challenge Supply Chain Disruption Now to Improve Growth During Recovery
Many companies have focused the past year on simply weathering Covid-related chaos. Surviving was enough for the hectic first months, but after more than a year in the pandemic, leaders need a new mindset to design for recovery and growth. Companies that use this time to reshape processes and partnerships can create real wins for the future.
Here, Flexport Global Head of Network Mariken Kruijff shares advice to help companies challenge their own organizations and grow—even when trade gets tough.
Massive disruption has forced a macro-level reset, but it’s not all gloom and doom. Rethinking what success looks like can help companies find new light at the end of the tunnel.
In some cases, the goal may be to recapture former markets or secure new ones. In other cases, an eruption of demand has overpowered old processes, requiring intense lift to avoid collapse.
Shipment lifecycle data can reveal trends or opportunities that were missed in the havoc of the pandemic. In the Flexport platform, a landed cost analysis is available for every single shipment. Over one hundred data points, related to SKUs, POs, cargo, transport, and customs, can populate reports to export at any time.
With a detailed view, companies can track changes in landed costs over time—and adjust as needed.
Kruijff recommends fine-tuning benchmarks with input especially from early-career team members.
“This is the year to seriously rethink your metrics,” Krujiff explains. “Ask newer staff to create processes they can measure and improve. That way, they can help strengthen the company’s culture of innovation.”
From there, test and bolster these new assumptions with relevant data and benchmarks to build strong launchpads for growth.
Choose to Challenge: Use periods of uncertainty to rethink how teams measure success. Benchmarking improvements, especially around high costs or other pain points, can streamline internal processes and boost company performance.
Last year’s unprecedented challenges have carried over: factory delays, shipping delays, changing customs regulations, and extraordinary shipping rates, to name a few.
Supply chain directors may be tasked with explaining to executives or investors why inventory levels are jagged or balance sheets need correction. But in times of total chaos, companies can swap traditional expertise for inventiveness. Kruijff urges ambitious thinking in these cases.
“Everyone has weathered a storm,” Krujiff explains, “and staying energized in the face of volatility takes fresh ideas. A network of subject matter experts, in-house or at a partner company like Flexport, can zoom out to find creative alternatives and rebuild the future.”
For instance, limited capacity on a cargo ship could threaten the delivery of goods, but a switch to air maintains business continuity. A change in tariff schedules could require updating customs documentation, but a product redesign nails down duty savings.
Find or vet solutions using data from purchases orders, booking requests, cargo tracking, or other organizational systems. Wild ideas can work in wacky circumstances, as long as they’re tied to reality.
Choose to Challenge: Ride the chaos; don’t give into it. Ensure a steady flow of new ideas that can surprise and satisfy investors, shareholders, and customers with innovative thinking. Consider outside voices that keep you and your team on their toes.
Krujiff suggests tapping into motivations in order to make the most of hard data that comes from Flexport’s platform or other sources.
Understanding subjective factors can support better strategy and operations. Think about importer versus exporter perspectives, why carriers take certain actions, or how customers respond in times of change.
Connecting motivations with data gives decision making an edge, especially when it comes to exception management.
For instance, carriers started denying booking requests for US exports last year because they needed to rush back to Asia after containers were stranded in the wrong places at the pandemic’s onset. Or suppliers in Europe may raise prices, because they’re light on plastics right now; polymer-converting factories can’t keep up with pent-up demand from 2020.
Make a simple assumption: Everyone along the supply chain is reacting the best they can to stupefying levels of disorder.
Diverse points of view can give the drama du jour some much-needed context and inform consistently better decisions that improve business.
Choose to Challenge: Before deciding what to do, ask why it’s happening. Bring in multiple voices to parse company specifics against industry trends and stakeholder motivations. Multiple viewpoints help develop high-impact strategy in an evolving trade climate.
Keep looking for innovative ways to tackle today’s supply chain challenges. By taking command of new approaches, companies can help ensure growth and longevity.