Bill Brooks, VP of transportation, Capgemini, North America
Bill Brooks, VP of transportation at Capgemini, North America, recently discussed bottlenecks at California ports and the larger disruptions behind them.
In an exclusive discussion with Chain Store Age, Brooks explained how larger global events contributed to ongoing supply chain troubles at ports of Long Beach and Los Angeles. He also outlined steps retailers can take to remediate supply chain disruption, including the use of artificial intelligence (AI) and machine learning (ML) technology.
What are the current impediments causing global supply chain disruption? There are numerous impediments that have weakened global supply chains and contributed to the recent bottlenecks in the ports of Long Beach and Los Angeles. First and foremost, countries like China and Australia, key players in the trans-Pacific trade, saw considerable spikes in COVID-19 outbreaks over the past several months, leading to closures and reduced capacity across manufacturing plants, storefronts, and transportation hubs. Now as these supply chains ramp up and attempt to meet consumer demand, the California ports cannot handle the surge.
The pile-up also partly arose from widespread staffing shortages at organizations throughout the world—including the ports of Long Beach and Los Angeles. Due to COVID-19 implications over the past 18 months, many workers have either taken sick leave or simply chosen to part ways with their companies, leading to reduced workforces and delayed supply chains.
It’s also important to note that—despite slowed production and transportation of goods—consumer demand largely remained high across numerous industries throughout the past year and a half. And now, during the current holiday shopping season, demand has increased roughly 12%.
Thus, with operational capacity at its lowest in months and demand at its highest, the supply chain is buckling — as seen in the docks across Southern California. Once production lines catch up in a few months and the shopping frenzy settles, the supply and demand curves are expected to even out, but until then, the market should continue to expect delayed supply chains.
What are some solutions retailers can use to mitigate current supply chain issues and overcome future disruptions? In the new normal, organizations should be equipped with an array of solutions to overcome future disruptions, such as global health crises or weather-related events. In the long term, companies should plan to adopt and integrate more technology offerings, such as robotics and AI capabilities, that will help anticipate disruptions and expedite operations.
However, in the short term, when dealing with issues like the bottleneck in the ports of Long Beach and Los Angeles, organizations should look to more immediate solutions, namely increasing throughput by extending business hours and hiring temporary workers.
What effect will supply chain backups at California ports have on the supply chain this holiday season? The current backlog of cargo ships off the coast of Southern California will hugely disrupt supply chains throughout the holiday season. In fact, this event is already causing a ripple effect, leading to late or limited products and increased prices.
And other ‘non-holiday’ products that already are notoriously low in supply and delayed, such as microchips and lumber, will also be affected by the California pile-up. To overcome these delayed supply chains during the holiday season and beyond, consumers are recommended to order early to help spread out demand curves.
How important is AI/ML technology for both predicting and learning from these types of catastrophic disruptions? Both AI and ML are essential to anticipate and overcome future disruptions. In the case of labor shortage disruptions, like the California port logjams, organizations can utilize AI- and ML-enabled robotics and automated technologies to expedite processes and tasks. This includes automating certain tasks, such as approving digital verification forms, to alleviate any strain on the workforce and help drive efficiency.
As of now, many companies throughout the global supply chain do not have many AI- and ML-enabled technologies, but this lag won’t last forever. In fact, organizations are actively leading major digital transformations as they increasingly recognize the potential ROI technologies will provide and learn from current disruptions.