Here’s how that article began: “With the havoc at ports showing no signs of abating and prices for a vast array of goods still rising, the world is absorbing a troubling realization: Time alone will not solve the Great Supply Chain Disruption.
“It will require investment, technology and a refashioning of the incentives at play across global business. It will take more ships, additional warehouses and an influx of truck drivers, none of which can be conjured quickly or cheaply. Many months, and perhaps years, are likely to transpire before the chaos subsides. …”
Add in the war in Ukraine, with corresponding U.S. sanctions against Russia and more from the EU coming soon, along with the new challenges from China related to COVID-19, and many people believe that our supply chain problems will get worse before they get better.
NEW CHINA COVID-19 WORRIES THIS PAST WEEK
“At least 373 million people—in cities that represent roughly 40 percent of China’s gross domestic product—have been affected by the most recent wave of lockdowns across China, Reuters reported last week.
“The strict lockdowns have left some residents desperate for food and led to viral videos of Shanghai residents screaming from the windows of their high-rise apartments. And with Chinese President Xi Jinping doubling down on the country’s zero-COVID approach, what happens in China isn’t likely to stay there. Global supply chains are set to take a hit.
“After all, Shanghai is home to the world’s largest port, and although it has largely remained open, trucks are struggling to unload cargo due to strict permit regulations, causing shipping containers to stack up. …”
The article goes on to list a whole series of challenges that the U.S. will face as a result of global supply chains being crippled — again.
BACK TO CURRENT CHIP DELAYS
And the current situation is already pretty bad for the delivery of many technology products. JP Morgan described the global chip shortage for automobiles in this article from last December, but they also believed things would improve this year.
At the end of March, Wired reported that “The Supply Chain Crisis Is About to Get a Lot Worse.” Consider this opening: “The supply chain is in chaos—and it’s getting worse. Air freight warehouses at Shanghai Pudong Airport are log-jammed as a result of strict Covid testing protocols imposed on China’s biggest city following a local outbreak. At the city’s port, Shanghai-Ningbo, more than 120 container vessels are stuck on hold. In Shenzhen, a major manufacturing hub in the country’s south, trucking costs have shot up 300 percent due to a backlog of orders and a shortage of drivers following the introduction of similar Covid restrictions. Major ports the world over, which used to operate like clockwork, are now beset by delays, with container ships queuing for days in some of the worst congestion ever recorded. The list goes on.
“More than a million containers due to travel to Europe from China by train—on a route that goes through Russia—must now make their journey by sea as sanctions bite. Russia’s invasion of Ukraine has also severed key supply lines for nickel, aluminum, wheat, and sunflower oil, causing commodity prices to skyrocket. Countries in the Middle East and Africa that rely on produce from Ukraine are likely to experience serious food shortages in the coming weeks and months. Some European automotive production lines have cut their output due to a shortage of wiring normally sourced from factories in Ukraine. If the pandemic, which triggered a surge in purchasing of goods, caused the global supply chain to buckle, Russia’s invasion of Ukraine and China’s continuing zero-Covid policy risk breaking it completely.”
CRN reported this past week that: “Half Of Apple’s Supply Chained To COVID-Infected China Region; Dell, Lenovo, HP Also Impacted.”
“A key HP supplier told Nikkei Asia, ‘May and June will be crucial for many consumer electronics brand vendors. If production does not ramp up in time for goods to be shipped via ocean cargo, there is a chance they could miss the Christmas holiday sales season in Europe and the U.S. due to congestion at ports.’”
FINAL THOUGHTS
So what does all this mean for a technology or cybersecurity project near you? In a word — delays. Leaders need to be working with their vendor partners now to best address the situation with potential workarounds and solutions.
Not every vendor or product is the same regarding the supply chain delays, but I am hearing about the good, the bad and the ugly regarding government technology and cyber projects all across the nation. Sadly, based on what I am hearing from numerous sources, expect supply chain issues to get worse for the remainder of 2022.
My recommendation: Assemble your entire executive team and put together supply chain contingency business plans now, based on various technology delivery scenarios, in the same way you plan for cyber (and other) government and business emergencies. Include project managers, budget (finance), legal, security, tech infrastructure and software groups and more.
This situation may impact contracts, pricing, delivery schedules, staffing levels (who works on what and when) and almost every area of technology maintenance and delivery.
Bottom line: Pay attention everyone, because our supply chain problems are far from over. We can get through this together with thoughtful planning.
