Labor shortage, shutdowns due to the pandemic, source material weakness and numerous other factors push global supply chains to the brink. Some shortages were resolved quickly, others linger. The supply chain crisis has proven to be more persistent than most experts predicted. So, are we facing another year of shortages or will the supply chain crisis abate in 2022? The bottlenecks are unlikely to disappear any time soon. Read the latest insights from Gartner
The Gartner report “Predicts 2022: Supply Chain Strategy” finds that unfamiliar risk events have reinforced customer and business expectations for more fluidity in supply chains. Ninety-two percent of supply chain leaders expect to adopt new business models within five years but they are struggling to mitigate risk because they lack visibility, collaboration and resource sharing with their trading partners.
What you need to know according to the Gartner Report:
- In 2022 and beyond, chief supply chain officers (CSCOs) must update their vision to account for ongoing and as-yet-unimagined disruption to global networks, operating models and stakeholder demands. Some of these disruptions are externally driven — such as material shortages, climate-driven disruption, labor scarcity and fatigue. Others are driven by the organization’s own transformation plans. According to the 2021 Gartner View From the Board of Directors Survey, nearly five-in-ten boards of directors (BoDs) in manufacturing companies have accelerated their digital business initiatives in the wake of COVID-19 disruption.
- Companies have developed the know-how to deliver traditional network operating outcomes, such as reliable, cost-optimized product supply and effective service delivery, during times of normal operating conditions. Many are struggling to adapt to today’s disruptions and have added a focus on risk-optimized growth events. The disruptions ahead require a broader focus. For CSCOs and supply chain leaders, this means an increased focus on areas of growing stakeholder concern, including sustainability and DEI.
- Words and commitments are not enough on their own — the “say/do” gap must be closed with action. Our predictions also signpost ways that supply chains will address these and other emerging challenges by competing in new ways with value-aligned ecosystem partnerships, modular design practices and augmented decision-making processes that support a more autonomous supply chain.
- By 2024, supply chains redesigned for modularity will operationalize business model innovations in half the time of competitors.
- By 2024, 70% of global organizations will report metrics to track realization in the supply chain against corporate diversity, equity and inclusion objectives.
- By 2026, more than 50% of supply chain organizations will use machine learning to augment decision-making capability.
A longer-term issue is to what extent supply chains change. The pandemic has raised new doubts about outsourcing production to far-away countries with lower labor costs. Equally, problems were aggravated by strategies to maximize supply-chain efficiency such as just-in-time manufacturing, where companies keep inventories to a bare minimum to reduce costs.
Supply chains with good visibility of actual demand and clear communication across supply chain tiers will be at a considerable advantage. In sum, it is likely that different industries will experience both shortages and over-supply problems throughout 2022.
Nevertheless, some procurement experts are still optimistic about 2022: “Anticipating the precise timing at which supply chain problems will unwind is impossible, but we think an improving health situation, expanding capacity and a global rotation from goods to services should reduce the pressure on supply chains next year,” says Angel Talavera from Oxford Economics.
TOP 10: Latest FMCG shortages
- A glass and aluminum shortage remains, which affects the beverage and spirits industries as well.
- Coffee prices are at an all-time high with an increase of 99.96% year-over-year due to weather issues for harvesting.
- Jumbo sized Avocados were previously in short supply but larger fruit is becoming more abundant, most fruit comes from Mexico right now due to damage in Southern California.
- Strawberries in the U.S. are also in short supply with the berries remaining small and without color.
- Cream cheese has been out of stock for awhile now. A combination of labor issues, the pandemic, and disruptions in the supply chain continue to be obstacles.
- Cat and dog food: Pet stores are struggling to keep popular brands on their shelves due to shipping and aluminum issues. Not only is there supply chain issues influencing this, but the pandemic has caused people to spend more time with their animals, leading to more feeding.
- Beef, Pork and Chicken tenders are in need of additional processing and packaging, which involves labor. The labor shortage within factories is creating a shortage of tenders. While it seems like there’s a shortage of chicken tenders, they simply are taking longer to be produced. This causes them to sell out fast and rise in price when people finally do find them. Chicken shortages are seen heavily in fully cooked wings and par fried tenders throughout the past year.
- Lunchables: Parents are having a hard time finding Lunchables for their kids. Part of the reason is because the demand for them is higher than it’s been in years.
- Toilet paper was one of the first major shortages people experienced in 2020 when the pandemic started. People panicked at the idea of not knowing what could happen, and ended up buying way more toilet paper than they actually needed. Not only did the increase in demand start the supply issues up, but the products needed to make toilet paper are seeing a shortage.
- Baby formula shortages seem to be doing a bit better than some food shortages, but it depends on locations and stores. The largest retailers had over 20% of their baby formula out of stock.
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