The global aluminum industry is the latest industry to suffer massive price hikes due to supply chain disruptions. Aluminum reached $3,000 a ton for the first time in 13 years amid anticipation that problems plaguing global distribution networks will persist well into 2022. These problems include COVID’s Delta variant sidelining much of the labor force in Asia, a global lack of shipping material and capacity, and climate change. Producers of aluminum, for example, are deliberately curtailing production to meet new environmental standards and reduce energy output.
Logistics companies may have little control over many supply chain disruptions, such as labor shortages in Asia due to COVID. To stay competitive amid these challenges, businesses should consider upgrading their distribution networks to meet the changing realities of the new global economy that has only partly bounced back from a global pandemic.
From 3G to 4G
Supply chain distribution networks have become increasingly digitized, with businesses relying on the Internet of Things (IoT)—physical objects embedded with software, sensors, and processing ability—to track and analyze their logistics operations. Companies that have digitized may have to do more to keep their supply chains competitive, however. Verizon, AT&T, and T-Mobile plan on phasing out the broadband network technology standard of 3G by 2022 in the United States, upgrading to 4G.
Companies that fail to invest in 4G broadband technology standard will have no way to collect or broadcast data throughout their supply chain once the upgrade is completed. Logistics managers will not be informed in a timely manner when a particular shipment reaches a port or distribution center. Warehouse operators may have problems with monitoring and temperature equipment within their facilities. Upgrading to the right broadband standard within the coming months will be a worthwhile investment for American supply chain companies.
Investing in Direct to Customer Shipment Capacity
Digitizing a distribution network will enable software upgrades to both warehouse and transportation management systems. Experts also recommend that companies invest in the capacity to ship products and goods directly to consumers. For some businesses, this could be a sizeable investment in a transportation network, or sales and marketing teams.
However, experts insist this can pay dividends almost immediately. As consumer demand continues to surge amid supply chain disruptions, this capacity can provide businesses with the resilience and agility they need to weather economic uncertainty. There is also great brand value in companies making a more direct connection to consumers.
Logistics Service Providers
Businesses can also upgrade their distribution networks by ensuring any third-party logistics service providers they partner with engage in the most up-to-date supply chain practices and processes. With so much economic uncertainty and disruption, supply chain companies and their partners need to achieve a higher level of synergy than in years past.
Companies should find logistics partners who routinely engage in distribution analysis, rather than once a year or every few years. Doing so ensures they can provide the services, capacity, or networks needed to help their partners respond with the increased flexibility and speed needed to address ever-changing consumer demands. It may be necessary to reprogram warehouse or transportation management systems every few months, to adjust to new conditions.
Third-party logistics providers can also help upgrade distribution networks through the equipment and material they utilize. Wood pallets, for example, continue to be used as they have in decades past despite the many advantages more modern plastic pallets have over them. Wood pallets are up to 35% heavier than plastic, resulting in larger transport loads that require more fuel, adding to a company’s Total Cost of Business (TCOB) and increasing a vehicle fleet’s greenhouse gas emissions. They are not widely recycled, adding to pollution at the end of their useful lifespans when they are discarded in landfills. They can also splinter or lose nails, fouling or damaging equipment and machinery in warehouses.
The right plastic pooling company can provide businesses with lightweight, durable plastic pallets that have many advantages over wood pallets. iGPS plastic pallets, for example, can be simply be broken down at the end of their lifespans and remolded into new pallets, resulting in a cradle-to-cradle, sustainable loop in a supply chain. They don’t have the size variations or tendency to splinter that wood pallets do, and incorporate smart features that make them traceable throughout a supply chain. These features make them ideal for a digital, automated, modern distribution network.
New and emerging disruptions continue to present significant challenges to the global supply chains. Logistics companies can weather these challenges by making strategic and robust investments that upgrade their distribution networks.
Companies investing in upgrading distribution networks use pooled iGPS plastic pallets for all their shipping needs. Our pallets are ideal for all types of warehouse automation and help reduce your Total Cost of Business. For more information, contact us at 1-866-557-0047, email a specialist at [email protected], or visit our contact page.