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Every coronavirus supply chain disruption is different

24 Mar 2020
Category: News
Author: Evan Pundyk

A food-processing company in Iowa that makes canned black and pinto beans grapples with an unprecedented surge in demand, forcing it to double production. But the facility still has the same number of dock doors it had before, demand for its products is normally very stable, and the dedicated carriers it uses to move its product don’t have extra capacity to spare. Compounding the problem, inventory is building up at production facilities without adequate storage, causing congestion and further inefficiencies.

Meanwhile, in Michigan, a tier 2 auto parts supplier prepares to shut down for six weeks because its major customers — and the Big 3 auto assembly plants — are experiencing an unprecedented drop in demand. But the supplier knows that when it comes back online, it will need to force a month’s worth of parts downstream to make sure that assembly plants will be adequately supplied in time to build for the new model year. The supplier needs an enormous amount of flexible trucking capacity for a brief period of time to avoid further clogging sensitive automotive supply chains.

Those hypotheticals illustrate how two industry verticals are operating through coronavirus-related disruptions. Viral infections in workplaces, rapidly changing consumer behavior and swift policy decisions — at both the government and corporate levels — have created a rapidly shifting landscape that affects different parts of the economy in dramatically different ways.

Aaron Galer, a senior vice president at Arrive Logistics, explained how third-party logistics providers are consulting with customers on creative solutions to extraordinary problems. Galer said he’s helped customers with plans including drop shipping, and working with co-manufacturers and co-packagers to alleviate stress on their operations.

Galer previously managed supply chains at a large e-commerce retailer and a large coffee company, in addition to several midsize shippers. At Arrive, Galer is part of the Strategic Partners Division, where executives with shipper experience foster collaborative, high-touch partnerships with Arrive customers.

“All I’m trying to do is be genuine as someone who was on the procurement and operations side of things for the majority of my career, be authentic, and focus on where our strengths are,” Galer said. “I’m coaching our sales reps and helping them understand our customers’ needs and what works for us together. Whether you’re implementing new tech, or going to quarterly instead of annual RFPs, we can say, ‘Here’s how we did it, and here are the questions to ask.’”

Galer discussed the examples of the food shipper and the auto parts supplier, pointing out that “coronavirus supply chain disruptions have been 100% dependent on who the customer is.”

Galer himself managed supply chain operations for a large coffee retailer while nor’easters shut down crucial production facilities and blocked roads; he also spoke about trying to service the Southeast region after Hurricane Katrina, when shippers had to compete with FEMA loads for trucking capacity. In our conversation, Galer said his experiences have allowed him to relate to the issues that customers are facing now, and while his previous career didn’t make him an expert on every customer’s operations, he has been able to help a range of customers develop contingency plans.

“Our Strategic Partners program is about being empathetic with the shipper and knowing beforehand what their challenges are,” Galer said. He said he helps shippers think about upstream issues that their co-manufacturers or co-packagers might be having, and how to lean on a network of suppliers to make their operations more resilient.

One example of the high-touch relationships that Galer cultivates with Arrive’s customers is the collaborative development of a business continuity plan, the “break glass in case of emergency” plan that companies rely on to transform their operations in a crisis.

Large companies typically have extensive and well-defined continuity plans that they consult regularly, at least in part for the kinds of disruptions like severe weather or labor issues that corporations sometimes encounter. But medium-size and smaller businesses often don’t have these plans, and Arrive can help them.

“We’re going to help you come up with a plan that has more foresight instead of being just purely reactive,” Galer said. “We want to help shippers come out on the other side of this thing knowing that they did everything they could to take care of their customers, employees and suppliers.”

To hear more from Aaron Galer and other members of the Strategic Partners Division, join Arrive Logistics and FreightWaves for a one-hour webinar on April 30 at 2 p.m. Eastern time. The webinar offers insights from these seasoned logistics leaders on today’s supply chain trends and challenges. To register, please click here.


Photo credit: Jim Allen/FreightWaves, original article posted here:

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