Vanta’s Viewpoint: Our supply chain has a problem
INDIANAPOLIS – Our supply chain (and value chain) have a problem. You don’t have to go very far to realize this is a true statement. It’s in the news, the vernacular of the political debate and the kitchen-table discussion. I have worked in this space for 29 years and have heard more about our supply/value chains over the last two years than ever before.
Quite frankly, our world supply chain has spoiled us. We went from ordering a Christmas sweater in August hoping to have it by November… to ordering in December and being upset that it hasn’t arrived next day …by noon! The sector of transportation in which I have worked is not quite the same size. As we say here at the Ports of Indiana, “Big Things Happen Here.” I have worked within the big commodities, raw materials and first layer of value-added production work. In our work, we see the beginning of the steel for the new car; the grain for food and fuel; and the raw products needed for gas, cereal, fried chicken, home lighting and every element of plastic that makes modern life possible.
So why a problem now?
Ultimately, we should have seen this coming. The system built over the last 50 years always had vulnerabilities. The reality is that all systems do. Managing the vulnerabilities, the risks and liabilities are the key elements of protecting any system.
First, the offshoring of production had a multiplier effect on the supply/value chain. Reducing goods’ cost also lowered native production opportunity. We traded costs for extended supply chain disruption risk, fuel risk, an unbalanced environmental stewardship and a higher carbon offput. The growth of consumer consumption creates a challenge in the form of higher volumes year-over-year against the structure of aged infrastructure that, at this point, is operating beyond the original intended design. Adding to the vulnerabilities are the challenges of age demographics in the human capital department: finding employees.
Yes, the supply chain is highly productive, data driven and automated. Yet in this environment, people are still the essential glue that make it work. Indeed, people are “essential” and after the last two years, we understand exactly what this means. The Great Resignation, Re-organization, Retirement – whatever it is labeled – means we are losing a great amount of knowledge and leadership.
The bright side is that we have fantastic hope in the Millennial and Gen Z groups that can and will do great things within our space. The downside to the equation is that only 2% of these cohorts recognize supply chain or logistics as a career path. And our freight network isn’t slowing down. Many in the field have predicted for years that freight will continue to grow. YIKES! We are not expected to hit “peak freight” until the years between 2040 and 2045. This is beyond my current retirement plan, but it’s highly likely that I will be dealing with accelerating freight levels for the remainder of my career.
“It is our continued bet that Indiana is the best investment in the nation, and we will continue to be a powerhouse economy in the Midwest. If infrastructure is needed, it will be accomplished here at the crossroads of the world.”
How do we help?
We start now and work every day for the next 50 years to promote what we believe can help fix the many issues outlined. The Ports of Indiana is already amid an infrastructure super-cycle of replacement and renewal with more than $58 million in capital infrastructure projects. It is our continued bet that Indiana is the best investment in the nation, and we will continue to be a powerhouse economy in the Midwest. If infrastructure is needed, it will be accomplished here at the crossroads of the world.
We have new docks, rail and road all coming online to facilitate the speed of business: bigger, better, faster. To this end, we seek to leverage our assets to create more work for people – ALL the people we can get to work in our sector. We will create more work by developing our trade and Foreign Trade Zone (FTZ) programs. We will also seek to win our fair portion of the $1.2 trillion of federal dollars that will be spent over the next six years from the Infrastructure Investment and Jobs Act.
Bring better transportation solutions to our state and we will continue to be the preferred choice of business leaders. According to the Indiana Economic Development Corporation, these facts speak volumes about Indiana:
- #1 – Manufacturing state in the nation (Business Facilities)
- #2 –Best property tax rates in US (Tax Foundation)
- #5 –Best state for business (Chief Executive)