Commentary:
I know several people who are supply chain managers. Over time, I have come to respect them more and more. The job of supply chain manager is becoming one of the world’s hardest and most stressful jobs. Whenever I am in a store, I find myself looking at products that I am never going to buy, but reading their labels so I can find out where they are made. In Costco you can find apparel made in China, fine cheeses made in Spain and Britain, and tools that are labeled “made proudly in the U.S.” When shopping, most of us do not think twice about how products get to us. A key player in this process is the supply chain manager, who has to be talented and effective in various fields.
First, a supply chain manager has to be part meteorologist. Last year, climate change caused a drought in Panama, affecting the water levels in the Panama Canal, and thus the number of ships that could use this passage from one sea to another. This disrupted and delayed shipments. Supply chain managers have to completely be on top of changing weather conditions in order to make sure materials and products are delivered on time. Think about the havoc caused to supply chains by Hurricane Helene, which hit the southeast U.S., followed by Hurricane Milton, which devastated the Gulf Coast region. Supply chain managers had to seek alternative channels by which to keep the logistics flow moving.
Supply chain managers also have to be political scientists. Imagine being a supply chain manager caught in the middle of the U.S.-China trade war and having Chinese products you are importing slapped with a 25 percent tariff, thus causing your company’s costs to go up. The pressure is on you to find ways to make up for these extra costs by being a magician in selecting the most economical freight carriers and storage options.
You also have to deal with changes that happen overnight. I imagine that many supply chain managers lost sleep over whether the recent longshoremen strikes were going to happen in the Gulf Coast and eastern regions of the U.S . - they did – and going to work the next day to try to manage the chaos and disruptions in the flow of products that occurred. What if you are shipping products to the Mediterranean region via the Red Sea and the Suez Canal, and the Houthi rebels start firing and disabling the cargo ships your products are traveling on? Time to find alternative routes and to work with your customers to modify delivery times.
Obviously, supply chain managers have to be experts in logistics, not only internationally, but also locally. Here in the Borderplex area (west Texas, Chihuahua, and southern New Mexico) the coalescence of infrastructure projects is causing headaches in supply chains. In a few months, the intersection of Artcraft Road and I-10 in west El Paso will be under construction to add overpasses at this critical point, in which thousands of cargo trucks pass through every day. This is in addition to the road closures on I-10 north of this intersection, in which the highway is being expanded.
Try to head south into downtown El Paso on the Border Highway and you will find it closed due to bridge repairs. If you are trying to ship your products from Juarez to El Paso via the Bridge of the Americas in central El Paso, better do it while you can, as this bridge will be totally shut down for reconstruction most likely until 2029. At present, there is a movement to completely remove commercial traffic on this bridge after completion, which will cause the need to find alternative routes.
Supply chain managers also have to be part accountant. During supply chain crises, do you order more stock to ensure that critical supplies or raw materials are available? This seems easy enough, but three factors pop up in decision making. First, what does ordering extra items do to a company’s cash flow? The company’s comptroller is carefully managing the budget. Can money be shifted from other areas to purchase more in order to address potential supply chain shortages? Second, does the company have room on-site to store the extra items? Some companies use third-party logistics firms (3PLs), which do the shipping and receiving for their clients out of the 3PL’s warehouse. Will the 3PL have extra room for the extra items? If the company requires more space in the 3PL, this will entail higher storage costs. Finally, could ordering more of one item hamper the ability of the company to order more of another item if it becomes necessary?
Finally, supply chain managers need good political skills. They not only have to deal with pressures from the production department, management, and accountants, they also have to deal with customers who are on their own production or delivery timeline with their own customers. A lot of long hours during disasters and disruptions are required of these special people. They are the heroes of getting products to us. More young, talented people need to go into this field.
Jerry Pacheco is President of the Border Industrial Association. Jerry Pacheco's opinions are his own and do not necessarily represent the views of KRWG Public Media or NMSU.