Supply Chain Shortages Have Shortchanged the Trucking Industry
Martin Pahulje - September 21, 2021
The COVID-19 pandemic has created a ripple effect of shortages in the supply chains of every industry. In addition to the global workforce taking a hit, it has become increasingly challenging to acquire the materials necessary for supply chains to operate. One particular industry that continues to struggle with these shortages is the trucking industry. Over the past year, new truck builds have been hampered by supply chain and building material constraints, resulting in production halts for many new trucks. Unfortunately, these shortages have extended and are now affecting fleets trying to service the trucks they already have. For trucking companies to overcome these shortages, they must first understand their cause.
Materials are Growing Inaccessible
Truck manufacturing is a complex process in which countless materials must be acquired. The trucking industry is being impacted by the inability to procure certain materials and the volatility of prices of inaccessible materials. Steel and rubber prices have been fluctuating rapidly, thus affecting the availability of tires and other parts such as blocks and housings. This also impacts lead times for parts – a part that previously took only days may now take weeks to acquire. This has drastically slowed down the manufacturing process for trucks, preventing new trucks from being produced and preexisting trucks from receiving maintenance.
In addition to steel and rubber growing more expensive and taking longer to access, it seems as though nearly every material or part is facing similar challenges. Bulk engine oil, barrels and pail, brake chambers, and more are becoming increasingly challenging to acquire. A single piece may take weeks to come, slowing other supply chain operations as a result. Some parts have become entirely unattainable, such as specific sensors, exhaust gaskets, and clamps. As a result, trucking manufacturers are forced to search for alternative parts. This creates significant delays in the supply chain and forces manufacturers to potentially acquire more expensive and less efficient materials.
An additional supply chain implication that particularly affects the trucking industry is a shortage of drivers. The combination of an increased need for truck drivers with a dwindling workforce has resulted in a massive driver shortage. Trucking companies are now scrambling to find qualified drivers to operate their trucks. Without these essential team members, trucks are left idle – wasting money and failing to meet demand.
It's challenging to understand why previously reliable and accessible materials have become nearly unattainable, but there are a few reasons. One significant contributor to the supply chain shortages in recent raw material limitations. Many of the materials required by the trucking industry have always been challenging to procure. But, it has not been until recently that new regulations have been placed, restricting the procurement of these materials.
Additionally, the pandemic created a self-inflicted surge in demand as a result of a perceived shortage. Consumers feared that products would become unavailable, so they bought products in large quantities to ensure access. As consumers bought more and more, an additional strain was placed upon supply chains. With this increased demand, manufacturers raised prices, cultivating a cycle of shortages and price fluctuations.
Best Practices to Overcome Shortages
Businesses within the trucking industry are troubled as to how they will survive these shortages. Unable to produce and deliver, companies are left idle while money is wasted. As a result, supply chain managers are eager to find a solution to these devasting shortages. How do you acquire unattainable materials? Essentially, you can't – but there are other solutions. Changing how your supply chain operates is the only thing that businesses in the trucking industry can do while we experience these shortages, which can be done in a few ways.
Evaluate Usage of Key Parts
First and foremost, as a manufacturer, you should evaluate your usage of key parts. Determine which parts are used most frequently and which are most necessary to production. With this information, you should order your most commonly used parts in bulk. This will ensure that should a shortage arise within these critical parts, your supply chain will be protected from delays and production halts, and you can maintain your fleet.
In addition to this, placing orders in advance is essential. There is no certainty of when another shortage will arrive or how long it will endure at this point in our economy. For this reason, you must place orders as much in advance as possible. The second that inventory is low, or a need arises, place the order – you'll thank yourself in the future. The key to supply chain agility is to act proactively, not reactively.
Unprecedented supply chain shortages have forced the trucking industry to get creative. Supply chain managers have had to look for non-traditional solutions, allowing them to continue operations without vital parts or while dealing with extended lead times. Onesolution is to use aftermarket sources temporarily. Aftermarket parts are replacement parts that are not made by the original equipment manufacturer but are used to replace damaged parts in vehicles. While not a conventional practice for many manufacturers, it can keep production moving during a shortage.
Another solution is to use remanufactured parts. Many organizations are beginning to practice this method independent of supply chain shortages, as it serves as a sustainable and cost-effective option for material sourcing. Instead of using brand new materials, manufacturers are using recycled materials and products to be repurposed. As these products already exist, they are much faster and easier to acquire than alternatives, which is necessary today as manufacturers are left without the materials they need.
Leverage Supplier Relationships
Now more than ever, businesses with strong relationships with their suppliers are patting themselves on the back. While this is a beneficial practice in general, today, it gives some companies a leg-up on competitors still struggling to acquire materials. These companies are leveraging their supplier relationships and examining all possible options to procure and repair parts. While this is not the ideal solution, it can prevent trucks from sitting idle for an extended time while waiting for parts. Instead, they find a temporary solution to keep operations running while manufacturers wait on parts.
Supply chain shortages have had a drastic effect on the trucking industry. Truck manufacturers and providers are facing extended lead times and delays, leaving trucks idle – without parts and even drivers. As a result, supply chain managers are seeking alternative solutions to keeping their supply chain operating smoothly during this transitional time. Fortunately, with an understanding of current conditions and the application of non-traditional solutions, supply chains can overcome these shortages and grow more resilient than ever.
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