The supply chain crisis has been going on for more than a year as a result of COVID-19 disruptions and a boom in consumer demand.
Consumers have faced short supplies of goods, including food, private jets, toilet paper, computer chips, and cars, suggesting that no market has escaped the effects of supply chain issues.
The term "everything shortage" was used to describe consumers' frustration as they failed to gain access to their chosen products.
Many factors have been blamed for the crisis, including raw material shortages, factory closures, a lack of truck drivers, and port congestion.
Insider's Grace Kay reported that in September, the largest port in the US hit a new ship-backlog record every day, as 65 cargo ships stuck at anchor or in drift area waited for ports to open up to dock and unload. Delays at warehouses and railways were caused by backlogs.
The crisis is not going to get better any time soon. According to economists, estimates range from early next year to late in the decade.
The crisis doesn't have clear boundaries. Even if port congestion in Los Angeles and Long Beach improves, there will still not be enough trucks on the road, workers in warehouses or delivery vans. The uncertainty around COVID-19 can cause delays and shutdowns.
Insider spoke to the president of Desert Cactus and the CEO of Mamenta about how brands can navigate supply chain issues in the new year.
There is a stretch inventory.
Retailers should build up their inventories so they don't go out of stock on marketplaces, according to the authors. "If a business keeps two months of inventory on hand, it would be wise to increase to three, four, or five months."
Marketing expenditures should be curbed.
In markets that brands will not be able to replenish consistently and in a timely fashion, it is necessary to slow down media spend and top-of-the-funnel marketing spend.
It's a local source.
Retailers should look into local supply issues in countries where they are experiencing supply issues.
It is important for brands to understand where materials are from, where things are manufactured, and where the company has inventory.
Once the organization is clear about where the stock is, they can assess what markets and cross-border markets they can work with. He said that this improves business within the current and future constraints.
Debut alternative products.
The same needs should be met by alternative products that are close to the ones that may no longer be available.
Use more factories.
It's time for retailers to look at adding more factories or searching for factories in other countries because of the capacity limitations in some countries.
China is having issues with power supply in addition to mass closed factories due to COVID-19, which is causing production delays.
Supply chain issues will persist into the new year according to both Epling and Stefani. It's best for brands to hedge their bets until things get better.