As the Biden administration floats band-aid supply chain solutions, companies must take matters into their own hands through technology.
By Ken Koenemann, VP of Technology and Supply Chain at Dploy Solutions
Unless you’ve been living under a rock for the past six months, you know the supply chain crisis has been a hot topic across every industry sector, especially leading into the holiday season.
But even as the media and government have paid a lot of lip service to the issue, both have missed the boat on pinpointing the real root cause of the problem. While congested shipping ports are a reality, and they do make for jaw-dropping images, they’re actually a symptom, not the cause.
The real issue behind supply chain fragility is the persistent labor shortage. According to Deloitte, the manufacturing sector alone is expected to have 2.1 million jobs remaining unfilled by 2030. And the American Trucking Association expects the U.S. truck driver shortage will reach 80,000 vacancies by the end of this year.
Without solutions to entice people back to work to address this root cause, the government will never solve the problem. Instead, implementing band-aid solutions simply creates a massive whack-a-mole affect, where solving one issue just causes another to pop up somewhere else.
For example, President Biden’s plan to implement 24/7 operation at ports in Long Beach and Los Angeles may temporarily clear the backlog. But it puts added strain on a workforce that’s already stretched too thin, forcing personnel to work longer hours. This will inevitably lead to burn out, more sick time off, and more resignations as people grow tired of being overworked. Not to mention, mass movement of freight at the ports will only cause bottlenecks at other points in the system. All that freight has to go somewhere, and if there aren’t enough trucks or trains to haul it, it’ll sit idle on loading docks.
Instead, companies need a way to take matters into their own hands and solve the problem themselves.
For most, automation could be the answer, providing both an immediate and long-term solution to supply chain woes. By using technology to automate low value-added tasks, companies can accelerate processes and redistribute staff to where they can make the most impact. Here’s how.
Build a supply chain control tower. One of the biggest issues in logistics is a lack of visibility across the supply chain. When companies can’t see what’s happening with their suppliers and transportation hubs, it’s impossible to be proactive and head off any bottlenecks. With a supply chain control tower in place, manufacturers can see what’s happening and shift production, redistribute orders or adjust shipping options to minimize hurdles. By gaining visibility, companies can identify alternatives, calculate the cost and risks of making a change before they do it and make smarter, proactive decisions. With a supply chain control tower, companies can optimize operations to avoid problems, rather than just being a victim of circumstance, and maintain a competitive edge.
Use video monitoring solutions. If your work process requires human operators to monitor production lines and equipment for errors or out-of-spec conditions, it’s time to replace that with advanced video monitoring technology. With the right solutions, these systems can not only monitor for faults but also make necessary adjustments in real time to keep production lines rolling. This real-time response can prevent further disruption to an already fragile situation, and it frees up human talent for use in other areas.
Implement Digital Standard of Work (DSoW). Training staff members is typically at least a two-person job—there’s the trainer and the trainee. Cut that staff demand in half by using DSoW technology to record work tasks and use this footage to train workers. By using video instructions and video monitoring of task performance, production lines can reduce errors and maximize quality assurance, which can prevent product loss, recalls and having to re-run orders, all of which can ease supply chain challenges. Companies can also use DSoW to cross-train workers quickly and reposition staff as needed.
Automate administrative processes. Manual processes within the order entry, purchase order and production planning can be a significant bottleneck and require excess staff time. In some companies, for example, we’ve seen as many as four or five buyers whose job is simply to release purchase orders. By automating administrative tasks, orders can get into production quicker, smoother and with less human intervention.
As things began to look a bit better on the COVID front near the beginning of September, many people expected that everyone would go back to work. Since that didn’t happen, we may need to face the reality that those workers may never come back. Companies must realistically figure out how to solve this problem themselves. Implementing supply chain automation is the only reasonable solution to the immediate crisis and for safeguarding against future challenges, as well
Ken Koenemann is the VP of Technology and Supply Chain Practices for TBM Consulting Group which includes Dploy Solutions. After joining the company in 2006, Koenemann has been responsible for driving TBM’s technology strategy, creating value-added technologies and services for client business operations. Koenemann is widely recognized for his expertise in translating lean principles to supply chain and customer-facing processes in manufacturing and service organizations. He has a Bachelor of Arts degree in management from the University of Missouri-St. Louis.