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Apr 05, 2021
The world learned a tough physics lesson after the 1,312-foot-long container ship, Ever Given, ran aground in the Suez Canal, blocking a shipping lane that handles some 12 percent of the world’s global trade. The global supply chain may absorb some lessons as well.
Whether or not wind caused the problem, the six-day ordeal was blamed in part on poor adjustments to the arrival of ever-bigger ships to handle mass consumerism over the past several decades. The repercussions to global trade expected in the months ahead is being blamed on a scarcity of containers that is already an issue due to the congestion at West Coast ports in the U.S.
Peter Goodman, writing for The New York Times, said the incident showcases the risks of utilizing just-in-time manufacturing and lean inventory approaches when unseen events such as a pandemic, cyberattack or a stuck boat can overnight roil global supply chains.
Oliver Guy, senior director, industry solutions at Software AG and a RetailWire BrainTrust panelist, believes the incident highlighted the importance of supply chain visibility.
“Imagine having the ability to see where all your orders are now — but also being able to project the impact on your supply chain several weeks from now,” he wrote on Software AG’s blog. “This would mean you could undertake analysis of multiple what-if scenarios to understand the impact, depending on how long the problem lasts. You could evaluate the cost-versus-benefits of alternative routes for different types of merchandise. This requires elimination of not just internal silos but the ability to reach outside to incorporate data from your suppliers and their shipping partners into the picture.”
Paula Rosenblum, managing partner, RSR Research and a RetailWire BrainTrust panelist, called out the “really lousy coordination between shipbuilders and canal operators and designers” and believes better collaboration across parties would have elevated contingency planning. On RSR’s blog, she wrote, “When it comes to global trade, we’re just not being thoughtful and careful enough.”
DISCUSSION QUESTIONS: What lessons should retailers take away from the Suez Canal blockage? Has the retail industry become overly reliant on the efficiency of global supply chains?
“The capacity of any system is equal to the capacity of its bottlenecks. As we found out last week, if the bottleneck is down, the entire system is impacted.”
“It is clear that both new ways of operating these ships, along with new rules for ship size and width, are critical today.”
“The lesson for suppliers is: stuff happens. Every supply chain in the world is vulnerable to something, somewhere.”
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