Originally posted on SupplyChain247 Which supply chain challenges will preoccupy companies in 2021? Many are reflected in MIT CTL's research agenda for the new year, so we asked our senior researchers to describe what they would like to achieve in 2021. Alexis Bateman, Director, MIT Sustainable Supply Chains: Better understand the state of supply chain sustainability amidst the Covid-19 pandemic and an emerging recession. Advance and pilot innovative circular supply chain solutions for end-of-life takeback across different channels. Explore the value of using carbon insets approaches to sustainability within the supply chain. Chris Caplice, Executive Director, MIT CTL, Founder & Co-Director, MIT FreightLab: Develop and pilot a more dynamic truckload transportation procurement and management process. The process would fully utilize a wide portfolio of shipper-carrier-broker relationships (from dedicated to contract to spot) to achieve sufficient capacity at minimal cost to the shipper. Create a better method for developing a future-looking transportation budget that incorporates probabilistic estimates of acceptance rates and corresponding alternate and/or spot rates. Better understand how disruptions impact the freight transportation market and how they can be minimized. Jarrod Goentzel, Director, MIT Humanitarian Supply Chain Lab: Leverage public and private sector supply chain data to support explanatory/causal analysis and model development that improves demand and supply planning for Covid-19 interventions and other health crises. Leverage the experience gained from Covid-19 to support emergency management preparedness planning and training. Build a system-level understanding of supply chain dynamics as a foundation for effective decision support, and cultivate private-public partnerships that enhance supply chain resilience through training and focused discussions. This work includes further evolution of our modeling frameworks and analytical/visualization tools for actionable analysis. Build on our market system monitoring methodology to design international development interventions, and extend...
Article originally posted on Supply Chain Brief Some say COVID-19 is changing the future of supply chain. It’s not. The pandemic has only reinforced what we already knew, what Bristlecone and other industry thought leaders have long been evangelizing: If not built to withstand disruption – or better yet, to leverage it –the supply chain can, and will, crumble under stressors like demand volatility. Our research indicates that COVID-19 impacted 98% of businesses, with 60% reporting an ‘extreme’ impact. Unfortunately, that means 98% of businesses learned a difficult lesson last year. And when compared to overall business impact, executives say their supply chain was more susceptible to disruption from COVID-19 than their workforce, systems or operations. Disruption dominated the headlines in 2020, but it’s a common story and a constant threat. According to a pre-COVID report published by the Federal Emergency Management Agency (FEMA), 40% of businesses do not reopen following a natural disaster. On top of that, another 25% fail within one year. And it’s not just natural disasters causing disruption. Political unrest, industry regulations, terrorism and other incidents can instantly derail a supply chain. Today, despite COVID-19 slowing maritime traffic, piracy is thriving off the coast of West Africa and two of the shipping industry’s key players suffered cyberattacks just ahead of their peak season. Most supply chains simply weren’t built to handle disruption on any scale. With the global supply chain becoming as much a dining room discussion as it has a boardroom discussion, COVID-19 has served to amplify and accelerate the need for supply chain resiliency. It has been a wakeup call for the C-suite, bringing with it a sense of responsibility and urgency. So, while...
Originally posted on K-Ratio Trucking is a commodity and like any commodity, its price, though volatile and unpredictable, is still subject to the principles of supply and demand. In 2020, these principles, and their derivative concepts, were stressed and stretched to their very limits but always held true. One would be hard pressed to find another calendar year containing as many economic cycles as the prior. Unfortunately, or perhaps fortunately depending on which business one is in, 2021 will likely pick up and continue right where 2020 left off. Despite the extreme seasonality typically found inside freight, markets do not stop or revert to normal conditions simply because we turn the page to a new set of days. Rather, all elements of seasonality and past historical trends should only exacerbate the extremes of supply, demand, and their intersection: price. Volatility is here to stay. The freight industry was already in the midst of an evolutionary change when Covid-19 hit. The industry’s response to it has been a much-need real-time exercise in digitization and modernization. Working from home became the norm with automation of some tasks and outsourcing of others. Headcounts have been reduced while factoring and nearshoring have grown. Freight has resisted change for years, incrementally allowing minimal advancement at its own pace. Last March, an unforeseen external event took every Fred Flintstone of freight out of their foot-driven vehicle, not quite into George Jetson’s flying car, but at least into the 21st Century. The juxtaposition of a volatile rate landscape set inside a rapidly changing industry environment will serve both as the force of reckoning for companies unwilling or unable to adapt...