Interesting subject. Which kind of crisis? What are the reasons at the origin of the crisis?

Perhaps this is a mega versions of the bullwhip effect that has affected the world community with a reduction in trading during the early covid period (also acerbated by a blockage in the Suez canal for many weeks). When we emerged from this people tried to restock causing above average demand whilst there were still shortages due to illnesses linked to covid (and other illnesses that had not been treated). You might like to read about the breakwater effect in an earlier paper I co-authored: Waves, beaches, breakwaters and rip currents – A three-dimensional view of supply chain dynamics by Peter Hines, Matthias Holweg and James Sullivan

Thank you very much for the article which I will read with pleasure. Indeed, crisis situations are not handled in the same way as routine situations. The issues could start to be specified in terms of "what has changed" compared to a classic situation: shortage, delay, uncertainties, absence, etc.

Please forgive my spellchecker. The question is: What is the solution to the supply chain crisis? Not "supplu"... the other question: What are the causes and solutions to the "Supply Chain" shortages? Not "ate" or "tge"...

I can recommend two possible solutions providing Supplier Chain Redundancy:

- ‘Just-in-Case’ Inventory (Buffer for Extreme Situation)

- So-called ‘Dual Source’ Supplier Chain Policy

Best Regards

Pavel

Among the reasons for the supply chain problem presented in the following article, in my view the shortage of workers is the most significant because in the U.S. the demand for goods is reaching an all-time high partly as the result of maybe 60,000 workers staying out of the work place and thousands more working at home and emptying the shelves at grocery stores and supermarkets.

https://research.gatech.edu/current-supply-chain-crisis-isye-experts-explain-what-happening-how-fix-it-and-how-prevent-it

"The Current Supply Chain Crisis: ISyE Experts Explain What is Happening, How to Fix it, and How to Prevent it from Happening in the Future

DEC 10, 2021 — ATLANTA, GA

📷

Port congestion is just one of the issues currently disrupting supply chains.

As the 2021 holiday shopping season continues, consumers are once again finding shelves empty, from simple products like cream cheese and sports drinks, to complex goods like cars and appliances. The reason? Supply chain disruptions.

While many people have heard the term “supply chain” and know it is the reason behind many product delays, most do not realize the complexity — and fragility — of our global supply chains. Problems like these are at the heart of industrial engineering, and the experts at the No. 1-ranked H. Milton Stewart School of Industrial and Systems Engineering (ISyE) at Georgia Tech are sharing their expertise with companies and federal and state leadership to help remedy the current problem and help ensure it does not happen again.

“Supply chains are incredibly complex and completely international,” said Pascal Van Hentenryck, A. Russell Chandler III Chair and Professor in ISyE. “They include container ships, warehousing, docking, trucks, trains, and planes, in addition to first- last- and middle-mile transportation. The current situation affects all these aspects. It is a massive problem. It’s not just one element.”

Behind the many systems involved, there are people making decisions and collaborating to ensure each segment is operating effectively and efficiently to keep the supply chain operating smoothly. This includes production, sourcing of raw materials, supply replenishment, and logistics. If one of these segments breaks down, the entire system will collapse. This process occurs for nearly every product available, leading to millions of supply chain transactions occurring globally each day.

Why are we Still Experiencing Delays?

When the Covid-19 pandemic took hold of the world in 2019, there were multiple disruptions to the system in addition to a dramatic increase in ecommerce, which created significant first- and last-mile issues. According to Van Hentenryck, this put additional strain on factories, ports, ships, and logistics companies that were already experiencing workforce shortages. In addition, many supply chains were highly optimized, just-in-time systems which allowed very little room for error or disruption. Nearly two years later, we are still feeling the impact.

“Everybody at every layer of the supply chain was hit by the pandemic in some manner,” adds Benoit Montreuil, Coca-Cola Material Handling & Distribution Chair and professor and co-director of the Supply Chain & Logistics Institute at ISyE. “Some companies still do not have enough employees to get the work done, while others have depleted their reserves or cannot source the necessary materials to manufacture their products. We have now seen that the lean approach has proven to be extremely dangerous.”

While this holds true for all supply chains, fresh foods and complex electronics are even more fragile.

The short shelf life of fresh goods, like meat and produce, collapses the entire process into the span of just a few weeks and adds another layer of complexity to the situation. Montreuil says that, for products like these, empty shelves are not necessarily due to a lack of supply, but rather a breakdown in processing plants or shipping.

Complex products have more complicated supply chains. For example, when it comes to electronics and cars, many of the components are being manufactured in different sites around the world before being sent to another location for assembly. If one of the many parts is missing, the product cannot be manufactured. This is the case with the current computer chip shortage that is affecting the supply of phones, appliances, computers, and other everyday items we take for granted. The shortage is a result of increased demand, depleted reserves, and lack of the manufacturing plants and workers to increase production.

“Like many other items, the demand for computer chips was increasing before the pandemic, and the industry was struggling to keep up,” said Chelsea White, Schneider National Chair in Transportation and Logistics and professor at ISyE. “The increased demand for personal computers, video conferencing equipment, and other electronics that use hundreds of computer chips put an even greater strain on production. Unfortunately, this industry requires a large capital expenditure for a new foundry and is not agile. It takes years and billions of dollars of investment to build the specialized plants required to make more chips. This mismatch of demand and supply will not be remedied quickly.”

In addition to production issues, there is also an extreme worker shortage in shipping and logistics, making it difficult to get products to consumers once they are assembled. For example, the American Trucking Association said the industry has a shortage of 80,000 drivers and estimates this number could more than double by 2030. Similar issues at the ports and on container ships are also causing significant shipping delays. Lack of integration among the many shipping components intensifies the problem.

“Containers are coming into the ports, but there are no trucks there to pick them up, because they are not ready for them,” explained Van Hentenryck. “Meanwhile, these containers are taking up space in the storage yard, so additional containers cannot be unloaded, because there is nowhere to put them. These are the kinds of issues the lack of integration causes.”

Solving the Problem

While the intricacy of the current supply chain problem is making it difficult to fix, experts believe it can be done. Companies will need to look at their processes through a new lens and modify them to resolve the current situation and prevent similar disruptions from happening in the future.

“Historically supply chains were organized around cost, but that is probably going to change,” said Van Hentenryck. “They will be built for resilience and flexibility so that they do not get stuck so easily. My intuition is that organizations will start moving away from the just-in-time systems to become more reliable and resilient.”

Montreuil agrees. To increase resiliency, he says companies may want to keep additional stock of key resources, but that the solution is more about changing production capacity and finding creative ways to address transport, warehousing, and resource shortages. “All of this is shaping the ‘new normal’ in supply chain, which I believe will ultimately be much stronger than in the past.”

Technology, including automation, machine learning and optimization techniques, will also be an important tool to address the worker shortages, to increase efficiencies, and to integrate processes.

“Automation allows businesses to create new business models,” said Van Hentenryck. “It can increase efficiency at factories, warehouses, ports, and on the roads while addressing the labor shortages. And, while it will eliminate some jobs, it will also create new, higher paying jobs in their place.”

Van Hentenryck is currently collaborating with Ryder System, Inc. on the trucking industry’s first data-driven study of the potential impact of autonomous trucking and expects similar studies to take place in other areas of the supply chain.

“People are looking for easy solutions, but that is not how supply chains work,” said Montreuil. “The good thing is that the current situation has increased the awareness of the problem, so we can work toward a solution.”

What Will the Future Look Like?

Both Montreuil and Van Hentenryck believe that organizations now understand how fragile the current system is and are working to prepare for future catastrophic events like floods, hurricanes, and other disasters that will also disrupt the flow of goods. While it is impossible to prevent pandemics and disasters from occurring, our systems should be resilient enough to handle them and keep goods moving.

“Companies are starting to think about their supply chains in a different way,” said Montreuil. “They are thinking about agility, adaptability, and optionality which is necessary to prevent these problems from occurring in the future.

“What this has shown us is that supply chains are immensely critical to the wellbeing of society and the economy. It has been unseen for decades, and Covid has shown how important they are,” said Montreuil. “It is also important to understand that even though we are suffering, the disruptions we are experiencing are minor compared to the disaster that it could have been.”

SOURCE LINK: https://research.gatech.edu/current-supply-chain-crisis-isye-experts-explain-what-happening-how-fix-it-and-how-prevent-it

Scott Mavers ,

If you wish to correct "supplu" to "supply," simply click on the upper right-hand caret on your RG discussion thread question, enter your correction, and then click on "save"!

Best regards.

The following economically and politically biased article nonetheless advocates the solution to the supply chain crisis of incentivizing workers to return to work, instead of being furloughed and living on unemployment compensation benefits. Although the article criticizes the Biden administration for prioritizing (1) restoring clean drinking water supplies; (2) removing pollution and contaminants from the soil; and (3) providing federal aide to public transportation systems, there is no doubt that these measures are consistent with environmentally- friendly and people-friendly policies that subordinate fossil-fuel based automotive and transportation considerations which may tend to undermine attempts to mitigate global warming and climate change which have left many Americans homeless as a result of catastrophic forest fires, storm floods, tornado proliferation, and similar disasters which scientists trace to excessive burning of gas, oil, and coal.

https://thehill.com/opinion/white-house/578908-getting-serious-about-solving-the-supply-chain-crisis

"📷

Getting serious about solving the supply chain crisis

BY AWI FEDERGRUEN, OPINION CONTRIBUTOR — 10/29/21 10:30 AM EDT 320

THE VIEWS EXPRESSED BY CONTRIBUTORS ARE THEIR OWN AND NOT THE VIEW OF THE HILL

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America’s supply chains are in a shambles. The Biden administration has the power to solve this crisis. To do so, it must urgently reform policies to incentivize paid work in our nation’s ports and supply hubs, invest in the infrastructure and logistics needed to move freight more efficiently and, ultimately, reinvest in U.S. manufacturing. The situation is dire and worsening every day. A massive shortage of electronic chips has sent car prices, new and used, through the roof. The global semiconductor shortage, which could extend through 2022, and subsequent component supply constraints have extended lead times to as long as 120 days for all but the most elementary mobile PC models.

Meanwhile, according to the Freightos Index, the median cost of shipping a standard rectangular metal container from China to the West Coast hit $20,586 — nearly double what it cost in July, which was twice what it cost in January, and 700 percent of its cost just a year ago.

Such paralyzing shortages mean retailers and consumers alike fear half-empty shelves this holiday season, now but a few weeks away. When these challenges became apparent at the start of this calendar year, the Biden administration took note. In February, the president issued an executive order calling for more resilient supply chains, facilitating domestic production, creating built-in redundancies and adequate stockpiles. In June, the White House announced a Supply Chain Disruptions Task Force to address short-term supply chain discontinuities. Another executive order followed in August, meant to maximize domestic production of essential medicines.

But the administration’s actions since then have undermined these goals. Less than 10 percent of President Biden’s $1.2 trillion infrastructure bill is devoted to fortifying core infrastructure such as roads, bridges and ports. More than 90 percent is earmarked for other priorities. For example, $126 billion would go to clean drinking water, solving the Western water storage and removing pollution from water and soil. Another $39 billion would shore up faltering and mismanaged public transportation systems. While worthwhile, these investments would do nothing to fix our nation’s supply chains. Meanwhile, the unprecedented unemployment benefits program enacted in response to the pandemic has exacerbated the crisis. By providing unemployed workers an additional $600 per week, it had the unintended effect of creating labor shortages in trucking and retailing precisely when the need is highest. The president’s press conference on supply chains merely created the illusion of solving the problem. He announced an increase of 60 hours of work per week in the Long Beach and Los Angeles ports, which he said will reduce unloading times by 25 percent. But this plan remains aspirational. Even if implemented, it will reduce total lead times by no more than a day or two. It is time to take the supply chain crisis seriously. This starts with getting people back to work in our nation’s ports and supply hubs. Employment policies and the federal and state governments must incentivize paid work and stop providing benefit programs that exceed working wages. Port infrastructure needs to be improved, not just in California but throughout the U.S., by adding docking capacity and storage facilities, and moving to 24/7 work schedules similar to the California ports.

The Memo: Russian crisis reverberates through Washington Ultimately, America needs to re-invest in onshoring our manufacturing and engaging in dual or multi-level sourcing. Companies like Intel have decided to build factories in Arizona. Adidas and Nike are building so-called smart factories here to complement their overseas facilities. Similar initiatives should be encouraged with favorable tax policies. The supply chain crisis is complex, to be sure. But it is solvable. Industry is responding to the extent that it can. Washington needs to get serious about delivering the right mix of targeted policies along with capital investment in critical infrastructure. Awi Federgruen is Charles E. Exley Professor of Management at the Columbia Business School and chair of its Decision, Risk and Operations Division."

SOURCE LINK: https://thehill.com/opinion/white-house/578908-getting-serious-about-solving-the-supply-chain-crisis

This is another politically oriented article which claims to be accurately based on surveys of Americans during the supply chain crisis:

https://fortune.com/2021/12/16/supply-chain-problems-55-percent-people-blame-government/

"55% of people blame the government for the supply chain crunch. But what’s actually behind the slowdown?

BY

MEGAN LEONHARDT

December 16, 2021 10:31 AM PST

"Product shortages and delivery delays are finally easing up, but many Americans increasingly blame shipping companies and the federal government for their inability to get their hands on the products they want.

About 58% of consumers say shipping and logistics companies bear “a lot” or “some” of the blame for the current supply chain bottlenecks that have led to shortages, according to Morning Consult’s survey of 2,200 consumers fielded last month and published Thursday. But nearly as many Americans, 55%, blame the government.

In fact, supply chains are complex and, in many cases, are global—which means there’s rarely one entity to blame when things go wrong. The Biden administration has taken several steps this year to help fix supply chain problems, including keeping ports open 24/7, meeting with business leaders, and even supporting a National Guard deployment to reduce trucking shortages (the White House later said it wasn’t actively pursuing this option at the moment).

Experts say that the current supply chain challenges are a result of a perfect storm of pent-up consumer demand being unleashed before the effects of the pandemic had truly passed. “As demand increased, pandemic-related disruptions continued to affect major ports and manufacturing facilities, dampening the supply response,” writes Michael Spence, a distinguished fellow with the Council on Foreign Relations.

During the pandemic, many Americans went on a shopping spree for electronics, home workout gear, and musical instruments. And they have continued their spending after vaccines became available.

Meanwhile, many industries along the supply chain—manufacturing, shipping, transportation, and even retail—were dealing with COVID outbreaks, worker shortages, delays, and soaring costs.

Manufacturers eventually ramped up production to meet demand, but that put pressure on companies responsible for transporting raw materials. At the same time, shipping containers became scarce, and finished products piled up. And then transportation costs soared. Shipping a container from China to the U.S., for instance, hit $20,000 in September, compared with just $1,500 in February 2020, according to the Council on Foreign Relations.

Bottom line, the spike in consumer spending created a domino effect that clogged the system. While the pandemic played a significant role, corporations’ reliance on lean and just-in-time inventory techniques to limit their costs likely also played a part. These approaches mean companies store less inventory, which can lead to supply shortages if demand soars or if there are supply chain issues.

It also didn’t help that some shipping companies, at the beginning of the pandemic, reduced their schedules, anticipating a drop in consumer demand. Or that some countries and governments have put restrictions in place to contain COVID-19 outbreaks that also impact manufacturing and shipping.

Economists have blamed these ongoing issues as contributing to rising U.S. inflation rates. The price of U.S. consumer goods and services rose 6.8% over the past year, according to the latest consumer price index.

But there is some good news ahead. Experts predict that supply chain constraints will continue in some form or another through early next year, but likely level off during the second half. In a report last week, credit insurance company Euler Hermes said global supply chain disruptions will remain high until the second half of 2022, but it expects global trade to grow 5.4% next year.

There is, of course, uncertainty about the impact of Omicron and any future COVID-19 variants, some of which are expected to be vaccine-resistant. “There’s a lot of uncertainty,” Fed Chair Jerome Powell said Wednesday. “What’s going to be the effect on the economy? That will depend on how much it suppresses demand as opposed to suppressing supply.”

Currently, research shows that vaccines and boosters work against the current COVID variants, so the more people who get vaccinated, the lower the economic effect, Powell said. But this doesn’t mean there won’t be any economic repercussions. “Delta had an effect of slowing down hiring, and it actually had an effect on global supply chains. And that hurt the process of the global supply chains getting worked out. So [Omicron] can have an economic effect. I just think at this point, we don’t know much,” Powell said. "

SOURCE LINK: https://fortune.com/2021/12/16/supply-chain-problems-55-percent-people-blame-government/

A short answer solution to the supply chain crisis is "e-commerce," which has the advantage of putting fewer vehicles on the road, thus is safer for people, more convenient, and environmentally more secure for everybody. In the long run and on a global basis, e-commerce could improve the future scenario by minimizing global warming and forestalling cataclysmic climate changes.

The supply chain issue is relevant to the entire world. This article has a global perspective and promotes a fairly optimistic solution:

https://unctad.org/news/heres-how-we-can-resolve-global-supply-chain-crisis

"Here's how we can resolve the global supply chain crisis"

18 January 2022

By Rebeca Grynspan, Secretary-General of UNCTAD 📷Vessels unload and load goods at the Port of Seattle, Washington, United States. Unsplash/Andy Li

"Our livelihoods – food, jobs, energy – depend on functioning and resilient global supply chains. Unfortunately, the uncertainty caused by the progress of the COVID-19 pandemic from region to region has made it difficult to resume business on a global scale.

At the same time, fueled by the e-commerce boom, container shipping freight rates are reaching record highs and transport capacity is being held up in congested ports. This represents a double shock for developing countries distant from global production hubs, with small island developing states (SIDS) and least developed countries affected the most.

On top of disrupting the delivery of much-needed vaccines and critical food supplies, the supply chain crisis may hike global consumer price levels by an additional 1.5 percentage points as a result of increased maritime transport costs, according to UNCTAD’s latest Review of Maritime Transport. The impact on prices in SIDS is five times higher, with 7.5 percentage points additional consumer price inflation.

What caused the supply chain crisis? On the demand side, growing e-commerce and economic stimulus packages have put additional pressure on carriers, ports and intermodal transport providers. On the supply side, the pandemic has slowed down operations at all levels.

A container now spends 20% more time in the system for a typical door-to-door trade transaction, and ships, trailers and containers are stuck in congested ports. This means that we need more transport capacity and equipment for the same volume of trade – but this takes time to build and procure. Congestion is hurting trade and threatening our sustainable development aspirations. In the short term, only improving the performance of existing facilities can alleviate it.

The supply chain crisis was caused by backlogs across major supply chain hubs. It will almost certainly continue into 2022, negatively affecting trade and reshaping trade flows across the world. The ongoing geopolitical tensions among some of the major economies may result in renewed trade confrontations, with important repercussions for global supply chains as countries could move production to locations that are closer, geographically, and politically.

In addition, agreements such as the African Continental Free Trade Area and the Regional Comprehensive Economic Partnership are expected to influence global trade patterns. Regional trade within Africa and within the Asia-Pacific area is expected to increase, but also by diverting trade away from other routes.

Increasing resilience in supply chains Long before COVID-19, Fourth Industrial Revolution technologies were already bringing about a reorganization of global value chains involving significant relocation of production. The pandemic has accelerated these trends, as the resilience and dependability of production have become more important, and both automation and "reshoring" (bringing production back to its country of origin) allow for more flexible adjustment to changing demand, mitigating firms’ risks in the event of a pandemic or other external shocks.

To resolve the supply chain crisis, developing countries have an opportunity to develop and strengthen regional value chains through regional pacts. These can ensure that small firms cooperate to reduce transaction costs and benefit from economies of scale.

Manufacturing in developing economies also needs long-term financing. In countries where the capacity to develop regional manufacturing hubs exists, firms may be unable to tap into value chain opportunities or scale up production when demand rises, because of lack of funding at affordable prices. National and regional development banks need to play a stronger role in this, through new regional and South-South arrangements.

Evolution of developing countries' share of world maritime transport by volume📷Source: UNCTAD's Review of Maritime Transport 2021

Regional integration could not only increase trade flows but may facilitate structural change, as it may be easier for local firms to export goods with higher value added to regional than international markets. Economic integration through trade agreements may also foster resilience: recent UNCTAD research shows that trade within trade agreements has been relatively more resilient against the COVID-19 global trade downturn.

At the same time, pandemic-driven digitalization requires countries to prioritize their digital infrastructures and supply chain investments. The digitalization of ports and public border agencies is a case in point. Customs automation, pre-arrival data processing, port call optimization and other digital solutions can help speed up port handling and customs operations.

The future of supply chains The supply chain crisis gave the world a glimpse of what a climate crisis would look like if left unchecked. A global climate catastrophe will dwarf the impacts of the pandemic. Its consequences will be felt especially by developing economies that are already suffering relative economic losses three times greater than high-income countries due to climate-related disasters.

UNCTAD’s latest Trade and Development Report calls for a transformative approach to climate adaptation, with green industrial policies to drive growth and job creation along more resilient and greener value chains. A green industrial policy should proactively identify the areas that present the most significant constraints to climate adaptation investment, channel domestic and foreign investment to these activities and monitor whether these investments are managed in such a way as to sustain decent employment and to increase long-term climate security and productivity.

We need large-scale public investment in building a diversified low-carbon economy, powered by renewable energy sources and green technologies. Talks at COP26 held in Glasgow in November emphasized the urgency of scaling up climate and adaptation finance and providing the pledged $100 billion annually.

The need is real, and the time to meet it is now. Estimates show that annual climate adaptation costs in developing countries could reach $300 billion in 2030 and, if mitigation targets are breached, as much as $500 billion by 2050. We must act now to decarbonize shipping and build resilient global supply chains to keep trade flowing.

The article was first published on 17 January on the World Economic Forum's website.

SOURCE LINK: https://unctad.org/news/heres-how-we-can-resolve-global-supply-chain-crisis

The key passage in the aforementioned UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTD) LINK about the long-term global solution to dealing with supply chain issues is: "We need large-scale public investment in building a diversified low-carbon economy, powered by renewable energy sources and green technologies. Talks at COP26 held in Glasgow in November emphasized the urgency of scaling up climate and adaptation finance and providing the pledged $100 billion annually." In other words, the current supply chain crisis is merely a warning of a looming climatological post-industrial global supply chain disaster which will dwarf the novel COVID-19-SARS-CoV-2 and its variants.

The aforementioned LINK is worth repeating for its vision of a globalized solution, which requires international planning, cooperation, and implementation:

"We need large-scale public investment in building a diversified low-carbon economy, powered by renewable energy sources and green technologies. Talks at COP26 held in Glasgow in November emphasized the urgency of scaling up climate and adaptation finance and providing the pledged $100 billion annually."

SOURCE LINK: https://unctad.org/news/heres-how-we-can-resolve-global-supply-chain-crisis

All three tools from the resilience toolbox must be used in the solutions. To put it simply: in the short term it is about perseverance, in the medium term it is about adaptation and in the long term it is about the transformation of the supply chain. See:

Article Two perspectives on supply chain resilience

Article Dancing the Supply Chain: Toward Transformative Supply Chain...

The main cause of supply chain disruption is information distortion & poor coordination among key players...use of the right information technology and the choice of the right partner is the possible solution.

would the blockchai a relevant answer?

I think that the solution to supply chain crises is to share information between supply chain actors, to recruit specialised logistics managers to monitor supply chains, to search for information and to process it. For example, in the case of the Covid 19 crisis, it started in China in December 2019 and some companies received and analysed this information early on to take proactive action against possible future disruptions. While others were unable to anticipate. Crises in modern supply chains can also be addressed by using Industry 4.0 tools. However, it should be noted that the solution to supply chain crises depends on the origin of the crisis: upstream or downstream? the type of company affected by the crisis? The type of crisis?

I totally agree with this analysis. What about the blockchain interest? What is currently the Supply Chain Manager role?