Will the Supply Chain Crisis Ruin Christmas?
The Supply Chain Crisis
With product demand on the rise for the holiday season, increased pressure is being put on the global supply chain, which is currently in crisis. You may have noticed that shelves in your local grocery and retail stores are emptier than usual. This is a result of a Supply Chain Management clog at harbors on the U.S. West Coast. In Los Angeles and Long Beach, over 80 vessels are queued in ports to be unloaded. The time unloaded cargo spends in port, known in the shipping industry as dwell time, is over 8 days.
While Los Angeles and Long Beach are overwhelmed with cargo, 28 ports on the West Coast currently operate with no clogs. Not all of these ports will accommodate the largest ships due to height limitations imposed by bridges and the depth of the harbors and channels, but some relief could be granted to Los Angeles and Long Beach if better routing and organization methods were implemented. Given the limited resources available to west coast ports, the spaces available at these ports must be utilized.
Nonetheless, even if every port was operating at the highest efficiency, getting ships docked and unloaded is just one checkpoint in the supply chain, which struggles on a systemic level. Land transportation and warehousing resources are also stressed, meaning that deliveries to and from distribution checkpoints are drastically slowed.
Dwell time is increasing due to scarce labor, storage and transportation resources throughout the supply chain. In the trucking, rail and air freight industries, the slow movement of goods due to resource shortages and regulation changes has only worsened the clogs at ports. Once ships are unloaded, cargo must be moved out of the port and into the supply chain, but the overflow of cargo compared to available transportation resources has put massive strain on the entire shipping industry. Because of these clogs throughout the entire supply chain, production facilities across the United States are unable to produce at their normal rate, leading to a shortage in supply.
Flaws of the Current “Solution”
In an effort to shorten dwell time, the U.S. government is pushing these major ports to execute a 24-hour/7-day-a-week schedule. This labor-intensive method has exacerbated the shortage of available workers, and it does not account for key factors that contribute to the clog, such as the current shortage of shipping containers, lack of storage for these containers and the inefficient process for returning containers to their home ports.
Even if the 24/7 schedule initiative was enough to get the ports back on track, cargo would still get held up in other facilities. Worker and space shortages have become prevalent in regional warehouses and distribution centers across the United States. Getting products moved to these facilities and beyond requires rail and trucking resources and workforces that are severely restricted or strained. The issue at hand is complex, and it will require a complex solution.
A Better Solution with Simulation
Current initiatives will only move the clogs somewhere else in the system because they do not address every factor that contributes to the inefficient flow of cargo. The best solution to combat these compounding issues will require a comprehensive study of the entire logistical system. To learn how to better improve throughput while maximizing the potential of limited workforce resources, our experts recommend creating a Digital Twin.
A Digital Twin is a computer model of the entire supply chain system that allows for experimentation on the ports’ logistical systems without causing disruptions to current processes, meaning that improvement strategies can be verified and validated before implementation. This is the safest and quickest strategy to create an efficient system. By creating a Digital Twin, you can address key issues in the following areas:
- Storage and Return of Empty Containers
- Production Facility Resources
- Trucking Resources
- Rail Resources
- Port Personnel
- Port Storage Space
- Docking Space
- Warehouse and Distribution Center Space
- Warehouse and Distribution Center Labor
Using a Digital Twin model, you can enable ports to evaluate how to best immediately distribute their limited resources, simulate the effect of increasing resources (such as labor pools or transportation resources) and study how changing regulations and procedures can contribute to the solution.
As consumers continue to have increased buying power, logistical systems cannot stay stagnant, and significant changes are on the horizon. The Digital Twin is the best planning, control and evaluation tool to address the needs of the entire U.S. supply chain.
Engineering’s Expertise
Engineering Group has the expertise and tools to produce an effective solution to this supply chain crisis. Our global Simulation & Data Science practice has broad experience in complex operations, logistics, manufacturing and defense modeling, and can support supply chain leaders looking to invest in the possibilities for optimization with the Digital Twin. As part of our Engineering Industries eXcellence vision, our team of specialists has the capability and drive to deliver a solution to this crisis so that you can deliver your gifts on Christmas morning.
