You’ve noticed it if you’ve tried to buy a new car in the past year. You’ve noticed it if you’ve had to buy any lumber. You’ve noticed it if you ordered any furniture. You may even have been one of the vehemently frowning and grumpy people I saw at Furniture Fair when my wife and I were trying to find her a new recliner who were “loudly asking” the frustrated and hopeless staff with the empty eyes (who would most likely quit this job as soon as possible) how the prepaid order for their couch could possibly have been delayed more than 4 extra months. If that was you, then SHAME on you! Your mother taught you better than that!
For many many months we’ve all been longing for things to get “back to normal” after 2020’s pandemic and lockdowns and just as it looks like we’re getting there, we find ourselves having to rethink what “normal” might be after such a monumental worldwide phenomenon.
Take, for example, the concept of Lean or “Just In Time” manufacturing that is pervasive among the worlds globally interdependent manufacturers of everything. It’s a relatively simple idea to keep all the links of your supply chain in sync with all the other links so that the components you need arrive right when you need them and don’t pile up anywhere in between. It looks good on a Powerpoint slide, it sounds wise, it sounds frugal, it sounds efficient. Hell, it sounds American! (despite it’s Japanese origin).
Here’s what has happened, though. When everybody started pulling on their supply chains, those long links that stretched across oceans aren’t able to do their part and it’s revealing a pretty significant weakness in the design. Lean / JIT depends on consistent ongoing production and delivery all along the “chain”.
I’ve just read that cargo ships are waiting five days just to get into the port of Los Angeles, and even after that it can take ten more days to get a container unloaded and onto a train or truck. And, as you might imagine, the increased demand and constrained supply for transportation has greatly affected the price of freight.
Closer to home, there are thousands of Ford F-150 trucks (the most popular vehicle in America) piling up in the parking lots of the Kentucky Speedway (and probably LOTS of other places) waiting for delayed components with microchips, apparently none of which are produced in North America.
So, here’s my point. North American manufacturers and assembly plants will all be rewriting their contingency plans and my sincere hope is that they’ll be taking a good hard look at sourcing their critical components CLOSER TO HOME. I’m not talking about total isolationism or knocking the idea of worldwide financial interdependence. I think that does a lot toward giving everyone reasons to play nice in the world. At Hyland we have seen several new opportunities, and some old ones that have come back, that lead me to believe we’ll all be paying much closer attention to the length of the links in our supply chains going forward into our new normal, and I’ll bet we’ll all be better for it.