Manufacturing companies learn value of pivoting product lines for immediate needs
These are trying times as the current healthcare crisis affects us in ways never imagined. This is especially true in the case of the supply chain, logistics, and transportation sectors.
What hasn’t changed, however, is the importance of strong, agile, and creative leaders. These are the ones able to pivot their companies in response to anticipated lower volumes of cargo coming into our ports, which – in the short term, at least — lowers demand for truckers and rail movement of products to market.
A recent report from Port Everglades in Broward County indicates that 42% of shipping/freight companies will update their supply chain strategies with 62% seeing investment in technology as a promising strategy for the post-pandemic world. These same leaders also anticipate the need for supply chains to be more flexible in a wide range of areas.
One technology investment will likely be in drone transportation, a sector that is expected to grow by $29.2 billion in the coming years. Leaders in manufacturing companies have also learned the value of pivoting product lines to meet the immediate needs of the market. For example, Kimberly-Clark is loading up on toilet paper. Its sales in the four-week period ending in mid-April are up 65%. Likewise, auto manufacturers such as Ford, GM, and Tesla are using their facilities to manufacturer ventilators, protective masks, and other healthcare products.
These products will help fill the supply chain for the short term until a semblance of normalcy returns. But the landscape will be different. Creative leaders will seek innovative strategies to accommodate newer delivery options such as drones, tighter delivery schedules, more efficient routing, and streamlined and safer loading/unloading protocols.
They will also have to deal with an evolving trucking industry. For example, the Wall Street Journal recently reported that the trucking industry could very well be decimated since smaller companies will likely falter. Companies with six or fewer trucks make up more than 90 percent of the carriers in the United States’ $800 billion fragmented sector.
Juan D. Morales is a Managing Director at the Miami office of Stanton Chase (www.stantonchase.com), a global retained executive search firm. He is also the Global Practice Leader for the Supply Chain, Logistics, and Transportation Practice Group. For more information, visit www.stantonchase.com.