As originally published in ExpertClick on August 31, 2023
CLAREMONT, Calif., August 31, 2023/ExpertClick/– Manufacturing and Supply Chain Consultant Lisa Anderson, MBA, CSCP, CLTD, known as the Strongest Link in Your Supply Chain® and President of LMA Consulting Group Inc., emphasizes the critical importance for owners and business leaders to understand how current events can significantly impact their supply chains. LMA Consulting Group works with manufacturers and distributors on strategy and end-to-end supply chain transformation to maximize the customer experience and enable profitable, scalable, dramatic business growth.
As the Panama Canal grapples with drought conditions causing serious delays in goods transportation, the ripple effect is being felt worldwide. “The Panama Canal’s crisis underscores just how vulnerable global supply chains are to current events,” commented Ms. Anderson. “With a 40% market share in containers moving goods from Northeast Asia to the U.S. East Coast, these disruptions reverberate worldwide.”
Due to inadequate rainfall, the Panama Canal authorities have reduced daily container ship passage by 20%, from 40 to 32 ships. The maximum allowable ship draft has also been restricted to 44 feet, compared to around 50 feet before the drought conditions. This situation has led to a backlog of 130-160 ships, creating substantial supply chain delays. An alternate route would add 8,000 miles to the journey.
While many companies have diversified their supply chain strategies in light of the pandemic, switching from just-in-time (JIT) to just-in-case inventory models, this latest disruption has far-reaching consequences. Costs are surging with $300 – $500 per container becoming increasingly common. “The shift from JIT to just-in-case inventory has buffered the impact to some extent, but we’re still facing an escalating issue that is driving up costs. A comprehensive understanding of the factors impacting the supply chain can equip companies to respond more effectively to disruptions, minimizing risks and costs. As the Panama Canal issue shows, a lack of awareness is not an option. In today’s connected world, staying informed is not just good practice – it’s a business necessity,” she concluded.
For more insights on how to navigate the complex landscape of global supply chains, download Ms. Anderson’s special report The Road Ahead: Business, Supply Chain & The World Order. She has also released: SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth to help organizations implement a proven process. Download it at: Amazon and Apple.
About LMA Consulting Group – Lisa Anderson, MBA, CSCP, CLTD
Lisa Anderson is the founder and president of LMA Consulting Group, Inc., specializing in manufacturing strategy and end-to-end supply chain transformation. She focuses on maximizing the customer experience and enabling profitable, scalable, dramatic business growth. Ms. Anderson is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, a Top 16 ERP Expert to Follow by Washington-Frank, in the Top 10 Women in Supply Chain by Warner PR, in the top 55 Supply Chain & Logistics Experts by flexport, and a woman leader in Supply Chain by RateLinx. She has been interviewed by Fox News and published the ebook, Future-Proofing Manufacturing & the Supply Chain Post COVID-19, Her primer, I’ve Been Thinking, provides strategies for creating bold customer promises and profits. An expert on the SIOP process (Sales, Inventory Operations Planning), advancing innovation, and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, Bloomberg, and The Wall Street Journal. For information, sign up for her Profit Through People® Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.