Ongoing supply chain and procurement disruptions are expected to impact this year’s Thanksgiving celebrations, with manufacturers facing a shortage of ingredients and packaging materials to ship products. In addition, refrigerated truck capacity is as tight as ever. Shippers are paying record-high prices to ship merchandise – even $5/mile on some lanes.
Experts warn that everything from the price of cranberry sauce to the price of turkey could be different this year. Supply chain shocks can be avoided by outsourcing dinner to local restaurants and shopping early. As manufacturers grapple with supply chain shocks, consumers will resort to alternative sourcing strategies, including online shopping and outsourcing.
Experts are warning of increased prices on discretionary products, shipping delays for last-minute decorations, and holiday staples that are low in stock. However, for those who are still ready to celebrate this long-standing American tradition, there are ways to ensure your gravy turkey sits on the table just in time for the feast. While the perfectly sized turkey may be low in stock at the supermarket, manufacturers are not anticipating a shortage of birds this season – but everything touching from household supplies to critical business resources.
It’s important to note that supply chain disruptions occur more than more people expect, and the impact associated with holiday disruptions is increasing, especially during this post-Covid era. Individuals and organizations plan as if “black swan” events occur once in a generation, but in reality, these types of events are occurring every three to four years.
How to Avoid Supply Chain Disruptions?
1. Predicting Risks
Measures against social gathering and advocacy towards social distancing are driving down the number of people in social gatherings. Manufacturers and store managers are already realizing the implications of this dramatic shift. For instance, due to smaller gatherings, most people are preferring smaller birds (Turkey). In 2020, as families scaled-down holiday gatherings because of the coronavirus pandemic, smaller turkeys became increasingly popular, thus causing a shortage of birds under 15 pounds. To avoid supply chain disruptions during this thanksgiving, customers are advised to predict risks and develop mitigation measures.
2. Shopping Early
One of the reasons you should start your thanksgiving shopping today is because of supply chain and inventory issues. Your holiday shopping experience is likely to look different than in previous years. Alongside issues with the supply chain, staff shortage, the rising cost of goods, and problems filling shelves with goods, suppliers from all sectors are gearing up for difficult months ahead. By shopping early during this thanksgiving, you stand to enjoy the following benefits:
- Shopping early saves money.
- You’ll have a better selection to choose from.
- You’ll get better gifts.
- Your items will arrive in time and cost less to ship.
- You’ll save yourself anxiety associated with delays.
During this thanksgiving, it’s advisable to create a shopping plan and outsource crucial supplies in time, whether household or business supplies.
Local restaurants have been hard hit by the coronavirus pandemic, and outsourcing part of your Thanksgiving dinner (or its entirety) is one way to show your support for the hardest hit. Bakeries and restaurants have been prepping for the holiday for months, creating menus and streamlining takeouts for those who would prefer not to cook. So, to prevent supply chain disruptions during this Thanksgiving, it’s advisable to outsource part or all of your supplies.
4. Preparing for Price Hikes
Although cranberry products will be abundant in stores ahead of the Thanksgiving season this year, the prices have increased drastically. According to Ocean Spray Cranberry CEO Tom Hayes, company costs have risen amid supply chain problems, related to transportation issues and increases in the prices of raw materials such as aluminum and plastic. Customers should expect price hikes on consumer products following rises in manufacturing and transportation costs. Price hikes are expected across most product categories.
5. Assessing Impacts
Disruptions and delays negatively affect operations. These factors can make shipping more difficult, increase the cost of raw materials, extend lead times, and enhance supplier risk. Although these factors occur to any business and affect most supply chains, some are more vulnerable than others. If companies are unprepared to navigate through these disruptions, the magnitude of risk scenarios will be high. In responding to procurement disruptions, it’s crucial to prioritize risk factors and assess potential impacts. Some factors that lead to increased negative impact include:
- Limited flexibility
- Lack of preparedness
- Limited supplier visibility
- Single sourcing
- Centralized procurement
- Single-channel retail strategy
- Reliance on analog tools
Assessing risk areas and corresponding impacts can help you design an effective response strategy to remain sustainable even during catastrophic events.
6. Taking Action
With most supply chain disruptions, suppliers and businesses need to focus on near-term procurement restorations. To do this, businesses must keep a longer-term mindset as they consider the supply chain across three horizons:
- Restore. Focus on immediately re-establishing supply chain operations, transparently collaborating with vendors, and stabilizing your cash flow.
- Rethink. Evaluate capabilities required to support future supply chain operations with a balance between customer service, cost efficiency, and operational resiliency.
- Redesign. Design around future operating and commercial models, focusing on next-generation partnerships and capabilities.
These horizons ensure businesses have the tools to address immediate shocks and supply chain disruptions while positioning themselves for long-term success.
ProcurePort – Wading Off Supply Chain Disruptions
ProcurePort offers intuitive and customized procurement solutions, enabling organizations to rethink, restore, and redesign supply chains to set defenses against future disruptions. Customers will increasingly demand expedited deliveries and heightened levels of customer service during the post-covid era. This means that going forward, companies will need to operate with accuracy and speed to survive through supply chain disruptions. Contact ProcurePort to know exactly how you can wade off supply chain disruptions.