Distribution

Rice Krispies and the Slow Slog to Normal Logistics

Another day, another shortage. It’s a cereal problem.

“I go out to the grocery store and for the first time in three months I was able to find a box of Rice Krispies. It’s still very uneven the way we’re getting things back, even for domestic products, and we’ll still see a lot of that unevenness,” explains Matt Gunn, veteran supply chain technology executive, opining on the empty shelves that have become commonplace as talking heads try to predict the next spot shortage.

Matt joined us on The Great Supply Chain Podcast at the top of the month for an episode titled “Can Logistics Providers Carry the Torch of Technology Adoption?” He offered up a healthy serving of insight around the state of logistics, the long-tail impact of COVID and how supply chain organizations ought to learn lessons from this chapter in our history before simply turning the page.

Matt’s Rice Krispies are a perfect example of the slog back to normalcy. In 2021, a nearly three-month union strike at Kellogg’s was compounded by a 16% drop in rice production, further complicated by packaging supply shortages. The scarcity of the breakfast staple was remarkable enough for Kellogg’s to issue a comment in February 2022, months after the catalyst for disruption, “… due to supply constraints in manufacturing, there is a temporary shortage. At this time we don’t have an estimated date on when it’ll be back in stock, but we’re working as fast as we can to get back on store shelves.”

The reverberating effects of the pandemic are a reminder of how interconnected our supply chains are and how our stewardship over them must be mindful of potential blind spots and bottlenecks. Matt expands on this idea in advising us on strategies being employed to mitigate some disruption, like near shoring or reshoring, will take several years to ramp up. In the meantime, we need to get comfortable with volatility.

It begs the question how best to navigate that volatility while safeguarding consumers and B2B customers from the impact of that volatility. Matt offers key insight into what logistics providers can do: “It is in the best interest of shippers and logistics providers to encourage adoption of technology and modern practices so that together their service levels are higher.”

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But this gets tricky in the logistics industry. “Everything around moving freight is about people, so patterns are hard to find,” Matt says. “As normal has started to return and see the market again, I do worry because a lot of it hasn’t changed. It’s all the same words. It’s the same booths. The same people. I do hope we can continue to push forward and not forget the things that got us to this point.”

That’s where technology can make a splash.

Fundamentally, the centerpiece of technology adoption is to empower people that run supply chains to work smarter and with a greater focus on customer service. That technology generates data, which when harnessed, translates into business insights. Matt’s take on it is that the best among us simply use their data better, from origin to destination.

Taking full advantage of your data means taking full advantage of your tech stack. Whether we’re talking about supply chain execution or logistics orchestration, your software and technology must work for you on an ongoing basis. And the onus is shared. “As technology providers, we’re past the point of selling a boxed piece of software, implement it and walk away,” he cautions. Companies like Tecsys are partners in value delivery, and folks on both sides of that relationship are well-advised to nurture the collaborative outlook.

As we chart our paths out of choppy waters, I wanted to leave you with a few kernels of wisdom and key takeaways from my podcast with Matt and guest host Guy Courtin, vice president of Industry and Advanced Technology at Tecsys:

1. Not All Is Well. COVID is having a long-tail effect on supply chains. We need to hurry up and wait for things to normalize. But also, we need to investigate and address some root cause issues. As Matt explains it: “We need to buckle up and not focus on a ship that’s stuck outside of a port, but really go deeper into the issue. If you can see a ship and it’s unable to be unloaded at a terminal at destination, that gets you nowhere. We need to get to some of the forensics that are happening at origin as well.”

2. Show and Tell. According to Matt, it is incumbent on shippers and logistics providers to champion innovation with their customers. When logistics partners and their customers work together to leverage modern technology, there is significant opportunity to improve service levels and gain better visibility at high touchpoints. But he adds an important proviso: Championing innovation must be more than lip service. If you’re a 3PL or an in-house supply chain operation, you better back up your business case with real improvement.

3. Grow the Personnel. “As much as we improve technology and automation, there are always humans involved every step of the way. Whether you’re the one at the end consuming it and purchasing it, or you’re the one working in the warehouse trying to fulfill it, or even further upstream where you’re trying to ensure that freight is at the terminal, people are involved,” says Matt. He goes on to explain that people need to be equipped to perform valuable roles and that technology can help to offload more monotonous tasks better suited to system-driven tools. This provides personnel a path to spend more time with the customer and more opportunity to drive value through ‘human’ tasks.

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