Aug 23, 2023

Just a while ago, the latter half of 2023 risked witnessing a major historical event as UPS workers under the Teamsters Union prepared to strike. After multiple failed conversations, the United Parcel Service (UPS) faced a potential peak season with 340,000 fewer workers in what could have been America’s largest strike in sixty years. While talks are now in place to contain risks, the strike sheds a light on the delicate nature of the modern supply chain.

According to previously collected data, UPS processes over a fourth of American shipping transactions, handling about 20 million parcels a day. Last year’s surveys positioned UPS as the country’s leading package handler, serving both consumers and businesses across the nation. As a result, labor strategists estimated a strike could cost a record-breaking $7 billion in ten days, potentially creating recession-like effects for growing businesses. Despite remediation, supply chain experts still recommend evaluating business continuity plans since labor disruptions are likely to continue.

In less than a year ago, we have also witnessed a potential freight rail strike which could have cost the US economy $1 billion in seven days and numerous shortages. Similarly, the West Coast experienced costly downtime as port operators strived to reach better labor deals. With every disruption comes a ripple effect of consequences often enabling:

• Product shortage
• Burnt-out workforce
• Lost revenue

Simply put, logistics serve as the connecting point between manufacturers, distributors, and retailers. Therefore, downtime –whether caused by a strike or faulty workflows– can quickly impact production, product availability, and final pricing. To remain afloat during uncertain times, supply chain companies are encouraged to reexamine contingency plans and ensure the following action items:

• Diversify Carrier Options - It is essential to have backup shipping options in place to avoid any disruptions to business operations. Businesses that rely heavily on a single logistics provider for their shipping should consider diversifying their carrier options. This means identifying other shipping companies that offer similar services and establishing relationships with them. Because other large carriers are expecting a spike in shipping demands, experts also recommend forging relationships with smaller, local companies to keep costs down and close delivery gaps.
• Standardize Visibility Metrics for Easy Data Sharing - Another critical step in preparing for labor disruptions is to communicate with customers proactively. Companies should inform their customers of potential disruptions, whether from strikes, regulatory updates, or shortage announcements. By communicating with customers and partners, supply chain companies can set expectations and help them plan accordingly. This communication can also help build customer loyalty and trust.
• Prioritize Inventory Counting - Companies should ensure that they have sufficient inventory levels to meet customer demand in case there are any delays in shipments. This can include increasing safety stock levels or ordering additional inventory in advance. By having adequate inventory levels, companies can ensure that they can continue to fulfill customer orders even if there are disruptions to their supply chain.
  
  

Technology’s Role in Maintaining Business Continuity

During times of uncertainty, supply chain companies need to explore new ways to enhance their operations. One of the most effective ways to do so is by investing in technology. As we've seen multiple times this year, supply chain companies can face significant disruptions that impact their ability to deliver goods to customers. However, by leveraging technology, warehouses can enhance their resilience and navigate these unexpected challenges. While every automation solution is inherently unique, experts recommend choosing technology systems that address the following questions:

• Will it simplify team communication?

Another benefit of technology is the ability to enhance communication and collaboration between different stakeholders in the supply chain. By leveraging collaboration tools, such as cloud-based platforms and video conferencing, warehouses can stay connected with their suppliers, customers, and other partners. This can help ensure that everyone is on the same page and can work together to address any challenges that arise during a strike.

Voice-based systems have gained a lot of traction since they break down communication barriers while also supporting hands-free workflows. Teams can deploy updates across the facility without relying on individual users opening messages or hard-to-hear PA systems.

• Will it complicate data sharing?

Implementation hurdles are not to be overlooked when revising your contingency plans. If set up incorrectly, technology systems such as RFID locationing and digitized reporting can create blind spots within your facility, complicating operations instead of helping them.

Technology systems rely on connectivity to support real-time data sharing. Distributors may go a step further by working alongside a network strategy team to add multiple connectivity options, creating additional communication channels between devices.

• Will it simplify auditing and traceability?

Another way that technology can empower warehouses during strikes is by enabling them to better manage their inventory. By implementing automated inventory management systems, warehouses can track inventory levels in real-time. This can help ensure that they have the right products in stock at the right time. Additionally, it empowers them to identify any potential shortages or surpluses in inventory, which can enable them to adjust their production schedules accordingly.

Cloud-based warehouse management systems exemplify seamless data tracking as it enables teams to update inventory counts and share values with the rest of the supply chain. This can help manufacturers and retailers best assess how much product to keep in stock in the event of a labor disruption.

• Will it decrease labor expenses?

Automation is not an ultimate replacement for human labor but a means to simplify and enhance it. Next-generation systems such as warehouse robotics have been shown to double productivity, freeing up workers to accomplish more in less with less stress. Furthermore, technology can also help warehouses improve shipping accuracy and reduce the need for manual labor during loading, ultimately creating a better environment for workers without compromising throughput. This can help reduce costs and empower teams to deliver goods to customers faster and more reliably.

During times of uncertainty, supply chain companies need to explore new ways to enhance their operations. One of the most effective ways to do so is by expanding visibility across the supply chain to keep everyone on the same page as much as possible. By leveraging automation, real-time tracking, and collaboration tools, warehouses can enhance their resilience and ensure that goods are delivered to customers on time and with greater safety and security. While there may be challenges associated with implementing new technologies, the benefits far outweigh the risks. To keep investigating risks and explore custom solutions, meet with our automation team for an in-depth evaluation of your facility’s operational visibility.