July 2022

We're all aware of the situation in ports around the world – major backups, sometimes up to hundreds of ships long, and the kind of general congestion that would make a person with a bad head cold seem fine in comparison. That situation might just get worse before it gets better. On the West Coast of the United States, there is a potential strike brewing which could severely damage logistics, especially for goods coming in from Asia. It isn't just the ports – railway workers are threatening to strike as well, which could also exacerbate supply chain issues across the country.

While there have been promising signs that some of the threatened strikes may not happen, the possibility is still casting a shadow over the entire supply chain profession. Two ports on the West Coast alone bring in over 40% of the United States' shipping container trade with Asia. This may have some precarious results for organizations that depend on resources or finished goods from the continent, as they could deal with shortages as their goods stay sitting portside. With the world still recovering from the impacts of COVID-19, and dealing with current supply chain issues such as a global labor shortage and the war in Ukraine, labor unrest may tip the scales toward further global supply imbalance.

The news also spells potential disaster as 75% of all the cargo that comes into West Coast ports is meant for retail sales. With the high demand of the holiday season approaching, organizations may not have the goods to fill it. This could lead to a further explosion of inflation in the U.S. economy as companies raise their prices to suit their short supply.

The rail union strike also provides a significant risk to companies looking to ship goods across the country. Union disagreements with ownership have led to the possibility of 115,000 railway workers going on strike – threatening a crisis affecting not just raw material transport, but also crops and imported goods.

There may be a chance for resolution
This threat of a strike has not gone unnoticed – to quote a representative of the American Petrochemical Manufacturers group about the potential strike, "We want to avoid that at all costs especially when we are in a precarious situation like our nation is now in kind of our current supply chain crisis." While there is a possibility of governmental intervention in case of a strike, the potential for slowdowns still exists, threatening companies that may have stock piling up in warehouses.

During the period where there may be a strike, organizations should start taking steps to mitigate risk in their supply chains and look for alternatives for transporting their goods internationally or domestically. It is safe to say, however, that the woes of the supply chain profession are never over – once one emergency is looking like it's finished, another starts to rear its head.

Increased levels of inflation might be a global concern, but a slowdown in consumer spending is forcing retailers to make significant price reductions on existing inventory. And while this is good news for the average consumer, there is little doubt that unplanned price reductions will adversely impact the bottom line. 

CNN reported that Walmart told investors in its latest earnings call that there was a need to apply significant cost reductions to general merchandise such as clothing and big-ticket items, with the company citing food inflation as one of the reasons why existing inventory was unsold. Walmart is well known for its competitive grocery prices and the shift in consumer spending is, the news source said, likely to reflect customer priorities.

The key thing to remember is that Walmart is certainly not alone in having to make some tough pricing choices. And there is a consensus amongst analysts that over-optimistic procurement strategies across the retail sector have led to a predictable level of overstocking. In addition, the continuing disruption to certain parts of the supply chain has meant that the physical products in store are arguably not what the customer wants to buy.

Unwanted inventory = price discounts
According to Yahoo Finance, Target is also looking to reduce what a recent Bank of America analyst note called "bloated inventories."

Total retail inventories in May were worth $705 billion, the analyst note said, with an acknowledgement that certain retailers procured too much product during the post-pandemic spending boom. Add supply chain delays and seasonal purchasing habits into the mix, and retailers have been left with a double hit of unwanted inventory and limited consumer demand. 

"Big box retailers stocked a large amount of items such as home goods, electronics and big ticket items expecting continued resilience in demand," the BOA analysts said. "However, consumers quickly rotated to services spending this year and high inflation is also keeping some consumers at bay."

Unsold inventory is giving retailers a procurement headacheUnsold inventory is giving retailers a procurement headache.

This unsold inventory could also have an impact on the manufacturing industry. And while the overstocking problem across the retail industry could be a short-term issue, there is the potential for a downturn in orders. With that in mind, Reuters cited the concerns of Wall Street analysts who believe that Q2 2022 would be "the last three months of a good spell that began during the pandemic as consumers used stimulus checks to buy products." In fact, manufacturing activity slowed to a two-year low in June, the news source said.

Simply put, higher prices for physical products has been part of the reasons why inflation continues to rise, while the discretionary nature of consumer spending means that retailers need to rethink their priorities. Walmart CEO Doug McMillon told investors in the earnings call that the company expected customer spending on general merchandise to slow down for the rest of the year, an admission that gels perfectly with how BOA's analysts view the current state of play in retail.

"There is a mismatch between supply and demand in inventories," they concluded. "In other words, the inventory in stock isn't what consumers are trying to buy."

The start of a new soccer season in England is always a big deal for clubs and fans alike, but there are concerns that a lack of replica shirts will have an impact on kit-generated revenue. And while the players are unlikely to take to the pitch in last season's shirts, some fans are still waiting for their teams to give them access to branded products.

According to the BBC, less than 50% of teams in the top four tiers of English soccer have both home and away shirts available for fans to purchase. Supply chain disruption is being cited as one of the reasons why clubs are struggling to maintain or even stock inventory at physical stores, but (at time of writing) only 44 out of the 92 clubs had replica kits available on their websites.

However, the global appeal of not only the English Premier League (EPL) but also the lower leagues – which fall under the umbrella of the English Football League (EFL) – means that fans might be waiting months for a replica shirt.

For example, an unnamed EFL executive told the news source that his club had given the green light for 2022/23 designs in October 2021, but production facilities in Asia were still being affected by the ongoing pandemic. The problem, he said, was that predicted cash flow from the sale of shirts was hard to manage when you don't know when inventory will be available.

Soccer clubs rely on effective supply chains
If this seems like a first-world problem, then you need to take into account the level of revenue that replica kits generate for soccer teams.

A recent research report by Technavio predicted that the global football apparel market would grow by $2.62 billion between 2022 and 2025, with 55% of demand coming from Europe. Wearing your team's shirt – either at a game or while watching on TV – is part of the fan experience and every club will be reluctant to tell supporters that they can't buy a new shirt until midway through the season.

In addition, there is a consensus among shirt manufacturers that the start of a season is when most fans want to buy a new kit, with major brands such as Nike, Adidas and Puma all keen to ensure that their designs are visible both before and during a campaign. And while the supply chain disruption is unlikely to adversely impact EPL clubs in the short term (with the exception of Crystal Palace and Leeds United, who reportedly have neither home or away available), it is the teams in the lower leagues who will suffer the most from a lack of inventory.

On the plus side, the English soccer season does run from late July until the middle of May, so there is plenty of time for fans to purchase shirts. Christmas is also a peak time for replica kit sales, and manufacturers will be hoping that the delays in production and shipping will be under control by then. If not, then the dedicated fan may have to watch games in last season's (or older) kit. As long as their team is winning, then the shirt they wear is probably less important.

The ripple effects of the ongoing pandemic are still having an impact on global society, but there are signs that the disruption inflicted on the supply chain could be alleviated in the not-so-distant future.

Bloomberg reported that "modest improvements are showing up" in a number of industry forecasts, with the consensus among economists that the so-called supply strain is close to being under control. In addition, the shortages experienced within the supply chain in the last two years are likely to be dealt with in the near future, albeit that consumer demand for certain goods and services has also slowed, the news source said.

"Pressures in the global goods sectors, which have been a central driver of inflation, may finally be easing," Citi's Global Chief Economist Nathan Sheets wrote in a cited research note. "The bad news is that this looks to be occurring on the back of a slowing in the global consumer's demand for goods, especially discretionary goods, and thus may also signal rising recession risks."

Modest improvements are better than none at all
Despite Sheets' glass-half-full assessment of the supply chain, it is fair to say that companies will be keen to get back to normal sooner rather than later. Bloomberg cited several reports that give a good overview of where the distribution and logistics sector sits in terms of economic activity, and there is little doubt that the average consumer is more than aware of the challenges that the industry has faced in recent months.

The caveat is that the black swan event of 2020 was not only a catalyst for disruption but also an indication of future pain points within the supply chain itself. The U.S. Federal Reserve, for example, refers to these gaps as "shortages," with its latest Beige Book (aka the Summary of Commentary on Current Economic Conditions) noting that the labor market, materials or other essential elements for production are likely to be defining factors in determining a return to normalcy.

Companies should already be acutely aware that the pandemic is no longer the only disruptive game in town. According to Bloomberg's reading of the various reports, the war in Ukraine and China's "ability to remain a trade powerhouse" will have a significant bearing on how quickly the global supply chain will adapt to the new normal. In addition, the traditional markers for consumer confidence and spending – holiday shopping, for instance – may have to rely on the reduction of reported container congestion at major ports and other distribution centers.

"We'll be seeing back-to-school, fall fashion, Halloween and the all-important year-end holiday goods coming across the Pacific in the weeks and months ahead," said Gene Seroka, Port of Los Angeles Executive during a press briefing on July 13. "Even though some retailers have high inventories and may look to discount goods, I expect imports to remain strong — though tapered — versus last year."

Time will tell if the world is back on track but, for the moment, the signs are encouraging. And that is what really matters.

With GPS now a ubiquitous part of the digital society, the act of navigation or tracking has never been easier. Location-based apps know where you are and (inevitably) what you are doing, but a widely-available vehicle tracker that retails for $20 could cause significant disruption to the supply chain.

A recent report by cybersecurity firm BitSight found at least six severe vulnerabilities in the MiCODUS MV720 tracker, with the analyst identifying a number of organizations that utilize the device as part of their ongoing business operations. According to the authors of the report, the tracker can be hacked with relative ease and could result in "loss of life, supply chain disruption, unlawful data tracking, data breach, and more."

BitSight's research uncovered a variety of potential access points in the MV720, all of which had the potential to allow man-in-the-middle attacks, authentication bypass and persistent (or invisible) monitoring. Exploitation of any identified vulnerabilities would allow, the report said, a malicious actor to carry out a range of activities, including but not limited to vehicle disablement, deployment of ransomware and disruption to movement within a commercial infrastructure. 

Identify risk, limit exposure
There are reportedly 1.5 million devices currently in use, and the tracker Is used by both the private and public sector. Cyberattacks are an accepted part of the digital ecosystem, but there has been an increased focus on infrastructure by the black hat community in recent years.

Commenting on BitSight's findings, Richard Clarke (a national security expert and former presidential advisor on cybersecurity) said:

"With the fast growth in adoption of mobile devices and the desire for our society to be more connected, it is easy to overlook the fact that GPS tracking devices such as these can greatly increase cyber risk if they are not built with security in mind. BitSight's research findings highlight how having secure IOT infrastructure is even more critical when these vulnerabilities can easily be exploited to impact our personal safety and national security, and lead to extreme outcomes such as large-scale fleet management interruption and even loss of life."

Hackers might be after more than your locationHackers might be after more than your location

It is also worth noting that the U.S. Cybersecurity and Infrastructure Agency (CISA) also flagged up the vulnerabilities in the MV720, with the agency recommending a number of strategies to mitigate the potential for exposure.

The full findings of the report can be found here, but (at the time of writing) the manufacturer – China-based MiCODUS - has not released any patches or updates to fix the identified vulnerabilities. In the meantime, BitSight and CISA recommend that concerned users protect themselves (and their data) by taking defensive measures such as device disablement or discontinuation.

"The MiCODUS MV720 will not be the final device discovered to have critical vulnerabilities capable of threatening business operations, human safety, national security, and more" BitSight said. "The next critical vulnerability could be discovered in another GPS tracker, medical sensor, smart fire alarm, or other IOT device. [We] urge organizations to make every effort to preempt the next critical vulnerability by managing their adoption, and third party adoption, of IOT devices."

The current high cost of filling a car with fuel has generated headlines all over the world, and the knock-on effect to the commercial shipping and logistics industry has arguably highlighted the need for cheaper and more environmentally friendly vehicles. As more people shop digitally as opposed to at a brick-and-mortar location, last-mile delivery providers are increasing investment in electric alternatives across the supply chain.

Digital purchases are completed with the click of a button, but the physical product often has to be delivered by a commercial vehicle. More often than not, that delivery service is not using an electric option. However, business leaders should focus their spend analysis on vehicles that draw power from the grid and not the pump.

According to a recent report by Research and Markets, the global market for electric commercial vehicles is going to increase from 353,000 units in 2022 to 3,144,000 units by 2030 – a CAGR of 31.4%. From a consumer standpoint, it is the last-mile delivery sector that, the report said, will benefit most by switching to electric vehicles. In fact, providers that focus on a delivery range of less than 150 miles are expected to take advantage of next-generation commercial vans and trucks.

The green future is now
CNN reported that the U.S. Postal Service has confirmed that at least 40% of its new delivery vehicles will be electric, with the agency committing to purchasing 33,800 vans by the end of the year. Around 25,000 of these delivery vehicles will be designed specifically for the Postal Service's very specific needs, with the rest being "off the shelf" versions from automakers such as Ford, Mercedes-Benz and Rivian.

The latter has already received the thumbs up from Amazon, which has started to roll out custom-built electric delivery vans across the country. The eCommerce behemoth has been extremely vocal about its commitment to the environment and plans, according to a press release, to have 100,000 Rivian vehicles on the road by 2030. Amazon has been testing the performance capabilities of these trucks since 2021, racking up over 90,000 miles and delivering more than 430.000 packages, the company said.

Last-mile delivery is going greenLast-mile delivery is going green

Not to be outdone, Walmart is also getting into the sustainable last-mile delivery game. The retailer has announced that it will be purchasing 4,500 electric delivery vehicles from Canoo, all of which will be integrated into Walmart's existing commercial fleet. Around 90% of the U.S. population lives within 10 miles of a Walmart store, so the chance for the company to offer an environment-friendly and same-day delivery service for its eCommerce customers is a strategic advantage, the company said.

The shift from gas-powered to electric cars is nothing new – Tesla released its first production model back in 2008, for example – but the increased adoption of commercial vehicles that deliver not only packages but environmental benefits could be a game changer in the supply chain. The cost savings that come with a rechargeable battery as opposed to a fuel tank are just one part of the equation, as is the fact that electric vehicles are eligible for federal and state tax incentives. And while there will always be people who are wary of going green, the simple truth is that last-mile delivery options will benefit from being sustainable.

You'd be hard-pressed to find an industry where a well-oiled supply chain is more central to success than in warehousing. Whether it's for e-commerce conglomerates, brick and mortar grocery stores or big box merchandisers, warehouses contain enormous volumes of goods of every which kind. Through a  combination of automated technology, enterprise resource planning software, a well-defined mission statement and an actively engaged staff, a warehouse can put itself in a position to thrive and keep the supply chain moving.

But with an increasing number of warehouses missing some of these critical pieces, warehouses are struggling to put the supply chain puzzle — broken by the pandemic — back together.

One of the pieces that warehouses are missing is people, namely labor. When applicants are hired, it isn't long before they're on to another opportunity, or out of the industry entirely. Indeed, according to the Bureau of Labor Statistics, the turnover rate in 2017 for the warehousing sector was approximately 41%. It has since jumped to nearly 50% in 2021, which is down from just over 59% in 2020.

Numerous organizations are encountering the same challenge with labor, and as a result, are sweetening their compensation packages to encourage hires to stay aboard or to pick them over competitors. Abe Eshkenazi, CEO for the Association for Supply Chain Management, told Supply Chain Dive that it's a game of one-upmanship for many employers.

"Competition for talent at the entry-level is significant right now," Eshkenazi explained.

Because they're effective, wage increases have been the fallback option for many employers, which include organizations such as Walmart and Amazon. Walmart, which is the world's single largest employer, announced last year that it was raising wages for over 425,000 of its employees, including those who work in the supply chain. As The Wall Street Journal reported at the time, warehouse workers at Walmart earn an average of $20.37 an hour, substantially more than what the typical employee makes who works in store as a sales associate. Amazon, meanwhile, recently raised starting salary to $15 per hour.

But Eshkenazi says employers will have to go to greater lengths to be successful and get their turnover rates to a sustainable level.

"I'm not sure there's one silver bullet," he said. "You've got to give [workers] something more than just pay."

Perception plaguing warehousing
Providing that "something more" workers want — but don't think they have — may require changes of approach within the industry itself. Many believe that the sector lacks for opportunity, with little room for growth or ways to advance. Illustrating their point, consumer goods supplier Gopuff recently announced that instead of placing employees in alternative roles, it would lay off 10% of its global workforce due to the closure of several of its warehouses, Supply Chain Dive reported separately.

Susan Boylan, a senior director analyst for the market research firm Gartner, told Supply Chain Dive that warehouses must get ahead of the perception issue if they're to be successful with hiring and retention. Key to that is showcasing the career path that is possible in this line of work and what makes the profession fulfilling and fun.

"They have very smart infrastructure that rely on a lot of technology, but the prevailing image is a dusty old warehouse," Boylan said.

With the cost of gasoline still flirting with all-time highs, The White House has tapped into the nation's strategic oil reserve in an attempt to drive prices down by bolstering supply. But the strategic petroleum reserve, to many, is somewhat mysterious. Where is it located? When was it established? Who has the authority to draw from it? How much can it hold at once? Here, we'll provide some clarity on what it's all about.

What is the strategic petroleum reserve?
Created in the early to mid 1970s, the strategic petroleum reserve is a massive complex that houses crude oil, which is petroleum that has yet to go through the refining process. Installed following the oil embargo that created shortages for much of the world, which OPEC put in place during the Arab-Israeli War, the strategic oil reserve's purpose is to bring balance to the market when market forces — supply and demand — create instability.

Where is the strategic petroleum reserve located?
Controlled by the federal government, the strategic petroleum reserve isn't located in the Washington, D.C. area, but rather the Gulf area. The complex is lies just off the coast of Texas and Louisiana and the oil is kept in storage caverns that are buried in the ground. The Gulf of Mexico is a major production area for the United States' domestic oil flows. According to the Energy Information Administration, roughly 15% of crude oil and federal offshore natural gas production derives from the Gulf. The federal government decided to make the Gulf the destination for the reserve because of its salt dome storage and nearness to marine terminals, making it ideal for fast refining and delivery.

The strategic oil reserve is located along the coasts of Louisiana and Texas.The strategic oil reserve is located along the coasts of Louisiana and Texas.

How much does the strategic petroleum reserve hold?
At any given time, the strategic petroleum is capable of holding as much as 714 million barrels of crude oil, according to the Department of Energy. The most it's ever contained at once is 726.6 million barrels, but 714 million is the current authorized storage capacity. A standard barrel of crude oil is the equivalent of approximately 44 gallons of petroleum products. Generally speaking, 43% of the products derived from a barrel of crude oil are gasoline and 22% are diesel.

Who has the authority to draw from it?
Since the strategic petroleum reserve is controlled by the Department of Energy, which is part of executive branch of government, the president of the United States can tap into it when the commander-in-chief sees fit to do so. The circumstances that might lead to a full or limited drawdown are enumerated in the Energy Policy Conservation Act. The main one is in the event of a "severe energy disruption," which may have an adverse impact on the economy or the nation's safety. A sudden spike in the price of petroleum may also be sufficient cause for drawing from the reserve, if the president deems it appropriate.  

How much can be drawn from the strategic oil reserve at once?
The maximum rate at which oil can be pumped from the reserve is 4.4 million barrels per day for up to 90 days. At present, President Joe Biden has authorized releasing 1 million barrels of oil per day from the reserve.

Popular as a Thanksgiving side dish or included ingredient in main courses and traditional cuisine, green peas are pretty ubiquitous for a vegetable that's the very definition of bite size. Replete with vitamins A and C, and folate yet low in calories, they're a family staple for dinners and as a veggie to freeze since they keep so well.

But could the powerful pea also be the key to fixing some businesses' supply chain challenges? A Boise, Idaho-based food processing company is betting the farm on it.

As noted in its annual Environmental, Social and Governance Report, LambWeston — one of the world's largest food processors specializing in potato products — is using pea starch in lieu of traditional ingredients used for batter as a workaround for the shortages in several staple crops.

"This alternative is now used in many of our batters and coatings, solving a business problem while also reducing food waste," the report said, as quoted by Supply Chain Dive. "Looking forward, we will continue exploring how to incorporate byproducts into our products."

Improvising spurred by wheat shortages
Although batter can be made in several different ways and leverage a variety of ingredients — such as eggs, flour, leavening agents and more — wheat is a common one used. Since it's high in starch, it serves as an effective binding agent, helping batter congeal and stick as a coating. But due to the ongoing war occurring between Russia and Ukraine, a region responsible for much of the world's supply, wheat shortages have persisted. These have been evidenced by the higher prices for the staple food and "product unavailable" signs in grocery aisles and shelves.

Wheat shortages are manifesting themselves in many ways.Wheat shortages are manifesting themselves in many ways.

Pea starch, however, appears to be filling the gap sufficiently for Lamb Weston. The company further noted in its ESG report that the consistency of pea starch is "a near identical match to our traditional batters" both in how they look, taste and perform in cooking and food manufacturing processes.

Pea starch has also helped the company work through an unsuccessful potato harvest. Idaho, which is largely known for its potato output, yielded a fraction of the crop production it's accustomed to in 2021 largely due to adverse weather conditions like drought, wildfire activity and the effects COVID-19 had on the labor participation rate. Those influences, in part, bled into 2022, as spud farmers planted 25,000 fewer acres this year than they did in 2021, according to the Idaho Farm Bureau Federation and Intermountain Farm & Ranch. Lamb Weston experienced some of the fallout. In an earnings call with reporters ,Lamb Weston Chief Financial Officer Bernadette Madarieta said they slowed production line speeds because of the poor harvest. Potato is also used in some batter mixes.

The United States is a major producer of the world's supply of green peas, but the biggest by far is China. According to World Mapper, China is responsible for an average of 12.2 million tons of green peas per year. In a distant third is the U.S. with 0.15 million tons annually. 

While the supply side of the supply chain is showing modest signs of improvement — evidenced by successful harvests for staple crops that have helped to replenish spotty shelves and excess inventory — the prices for products customers buy are creeping steadily higher. They did so again in June, renewing expectations that the economy is on the brink of a recession — if it isn't in one already.

The Consumer Price Index, which shows the rate of inflation based on the cost of goods from 12 months ago, rose in June to 9.1%, as reported by the Department of Labor. The last time the CPI was this high was back in the early 1980s. Prior to the release of the data, economists predicted the rate of increase would be 8.8%.

The news likely doesn't come as a surprise to Americans. From the cost of fuel to rising electric bills, the price of just about everything is up appreciably relative to this same time a year ago. Lane Rhame, chief economist for FS Investments, told The Wall Street Journal that a market with too many dollars chasing after too few goods is the great equalizer; everyone feels the impact.

"Inflation makes everything difficult," Rhame explained. "It erodes your savings, your wages, your profits. It's punishing everybody."

This includes business owners. Because wholesale prices are also surging, which is documented by the Producer Price Index, companies are being forced to raise what they charge their customers for their goods and services to avoid selling at a loss. This includes manufacturers, restaurateurs and shop owners, many of whom already operate on very slim margins.

Food prices are up across the board.Food prices are up across the board.

Some question how inflation will wind up influencing the supply chain, both in terms of whether demand will slow as a result — allowing prices to diminish — and what changes business owners will make to their inventory.

James Knightley, chief international economist for ING, told CNBC that much of what happens will be determined by how the Federal Reserve responds to the latest indication of raging inflation.

"With supply conditions showing little sign of improvement the onus is the on the Fed to hit the brakes via higher rates to allow demand to better match supply conditions," Knightley warned. "The recession threat is rising."

Awash in inventory
Meanwhile, retailers are trying to decide what to do about their inventory situation. Throughout much of the pandemic, big box organizations, as well as small businesses, were short of the items families were looking to purchase. But with demand slowing down, retailers appear to have overestimated buyers' appetite for merchandise. As The Wall Street Journal reported, retailers are strategizing on their own as to what to do, with some offering deep discounts online and in store while others are waiting to sell later when demand will likely intensify. 

Prior to the Labor Department's release of the CPI, the White House forecast that the figure would likely be elevated. The Biden administration issued a press release shortly afterward, reassuring Americans that "tacking inflation is my top priority." The White House also said it will continue to release oil from the strategic petroleum reserve.

From beef and pork products to eggs and chicken breasts, food prices have skyrocketed across the board due to a variety of factors, the combination of which has created a perfect storm for buyers' budgets. The war in Ukraine has also contributed to soaring inflation, particularly for staple products like wheat, which is a major export from that part of the world.

But in a rare bit of good news, prices for wheat, corn and other commodities are starting to trend lower, thanks in part to above-average crop yields among major global producers.

Chief among those producers is Australia. According to Reuters, for the third year in a row, Australia is on target to exceed industry expectations on wheat output. Assuming severe weather conditions don't crimp production, which is always a possibility, analysts and traders believe farmers will harvest between 30 and 35 million metric tons of wheat by the year's end. This past year farmers had the best period on record, with 36 million tons of wheat harvested.

Phin Ziebell, an agribusiness economist for National Australia Bank, told Reuters he's optimistic about what the future holds.

"Are we looking at a crop of above 30 million tonnes for a third year in a row? I think we have a good shot at it," Ziebell explained.

The positive outcome was influenced, in part, by more capacity. Wheat farmers planted nearly 36 million acres, which is an all-time high, Reuters reported from data compiled by IKON Commodities.

Corn production strong in Brazil
Brazil is also benefiting from an above-average year for crop production. Helped by more precipitation than the country has had in years past, South America's largest country by area and population is on pace to produce more than 89 million metric tons of corn by the end of 2022, according to World-Grain.com, citing estimates from Agroconsult. Brazil is one of the top five countries for corn production.

Much of the world's corn originates from Brazil.Much of the world's corn originates from Brazil.

Even cooking oils are costing less than they have in the past. Palm oil, which is the most-used vegetable oil in the world by volume, is selling for about 30% less than its peak price point earlier this year, Bloomberg reported. This is due to more export activity from Indonesia, which is responsible for much of the world's palm oil production.

It isn't just successful growing seasons that have helped to replenish supply; demand has slid. Paul Hughes, chief agricultural economist at S&P Global Commodity, told Reuters that roughly one-fifth of the wheat that is produced worldwide is fed to farm animals. But because of broad price premiums on wheat, farmers are using cheaper staple crops for feed instead.

Despite these encouraging signs, the food supply chain isn't out of the woods just yet, according to Kenneth Zuckerberg, an economist at the financial services firm CoBank. Speaking to Supply Chain Dive, Zuckerberg noted a series of indications globally suggesting that demand still outpaces supply, citing Egypt, Taiwan, Algeria, Jordan and Pakistan as countries experiencing wheat shortages because of the war in Ukraine. He predicted things likely won't get back to normal for the next two crop seasons.

In an economy where too many dollars aren't just chasing, but sprinting after too few goods, product-based industries are doing all they can to maximize output and capacity as much as possible. In order to do that, they need adequate, reliable and steady supply from their vendor, ideally from several of them. But as many organizations learned during the height of the COVID crisis, supply and unpredictability often go hand in hand. Furthermore, obtaining additional vendors opens up the possibility of other problems frustrating 

For this reason, it's important to ask the right questions when evaluating whether a vendor is worth investing in an alternative to the one you're using now or as a supplement. Here are a few to ask that can help you make a smart choice.

1. Does your potential supplier have suppliers?
Every once in a while, a supplier is the single source for the materials you need. But more often than not, your supplier will also have a supplier. Ideally, however, the vendor you partner with should have multiple suppliers. As noted by Supply Chain Dive, a diversified supplier base ensures that if your supplier runs into issues with one, they can pivot to the other(s) to avoid disruption or delay. Asking about your supplier's supplier may give you ideas for who to contact for your material needs.

2. What will be your total cost of ownership to partner with another supplier?
Total cost of ownership refers to the estimation of overall expenses for developing a given product when factoring in all of the process aspects that go into its creation. This helps to more accurately determine your return on investment. But the same TCO mindset should be applied to obtaining a new supplier. For example, the total cost of ownership isn't just for the end product that you're receiving, but also what goes into ensuring that what you get is actually what you want. Thus, some of the costs associated with determining this can include inspection, transportation, warranty, training, education, scrap costs, labor and more. 

It's important to be judicious when choosing a replacement or supplementary supplier.It's important to be judicious when choosing a replacement or supplementary supplier.

3. Is your supplier invested in technological solutions?
Organizations that are using state-of-the-art technology are the ones you want to partner with because it demonstrates that they prioritize convenience and process efficiency. But it's important that they be invested in the right types of technology. Supply Chain Dive says smart tech solutions include automatic order processing, real-time order status monitoring and consignment tracking.

4. Do you and your supplier share common goals?
Of course, your supplier should have a great product, but it's also important for them to be goal-centered. You may be able to determine this by taking a look at their website. In the "About" section, you may be able to find information on their mission, values and core business objectives as they relate to their customers.

Organizations that have utilized traditional procure-to-pay (P2P) solutions are experiencing the need to monitor spend efficiency more closely. The same holds true for businesses that have deployed a combination of disparate systems, alongside enterprise resource planning (ERP) software. Leaders are prompted to seek more robust solutions—while lowering costs—and find that a comprehensive source-to-pay (S2P) platform is the answer. 

sourcing cycle with multiple considerations
Automate Source-to-Pay Workflow

Increase Workflow Automation
When S2P solutions are implemented, organizations can increase the automation of their workflow and reduce critical cycle times. The ease of use, simple implementation, and visibility across robust procurement workflows are unmatched with end-to-end platforms. Meanwhile, organizations that rely on general ERP applications, may require supplemental tools to manage their complete sourcing to payables process.

Seamless Integration
The best fit S2P will offer a plug and play install and seamlessly integrate with all ERPs. This eliminates the need to migrate data from existing tools or worry about costly downtime. When multiple solutions or “extra” modules must be deployed to extend to end-to-end coverage, customers encounter added cost. This is more painful when teams refuse to adopt the individual ERP or niche solution because it does not meet their needs or otherwise lacks flexibility. 

Tech-Enabled Solutions
When S2P solutions are enabled with the latest technology, features like artificial intelligence support advanced capabilities through process automation and document processing. This is demonstrated in Intelligent AP Automation by eliminating inefficiencies associated with manual processing and boosting compliance. The capabilities of complex document recognition, sorting and classification accessible through a simple, customizable user interface are transformative to the way purchasing is managed. 

Image displays bar chart to demonstrate growth
Monitor spending while reducing costs with your S2P

Intelligent Assistants and other proactive technology are further differentiators seen in S2P platforms. These features add an expanded element of convenience by enabling users to access documents and workflow details, through conversational or text prompts while on the go and outside of the platform interface, using recognized communication tools. 

End-to-End Processing
S2P solutions are designed with the full sourcing process in mind, extending capabilities and workflow visibility.  

Let's take a step back for a moment to days of the 1990's-2000's tech boom and consider a company so far ahead of its time that it was doomed to fail. WebVan was a California tech startup that promised at-home grocery delivery services for a relatively low price, eventually going bankrupt in 2001 as the bubble began popping. Now, 21 years later — their legacy lives on as companies of all sizes and kinds are vying to get their share of the grocery home delivery market.

The market for home delivery is growing
The pandemic brought significant interest in grocery home delivery, no longer would people have to leave their homes and risk illness to get basic supplies. The market boomed, and hasn't stopped booming as more consumers have caught on to the convenience of not having to go to the stores for their basic necessities. According to ResearchandMarkets.com, the market for at-home delivery was around $25 billion in 2020, and is expected to skyrocket to $72 billion by 2025. With this growing market, it's no wonder that technology companies have jumped at the opportunity to become WebVan 2.0, with grocery companies also following the trend, looking to engage their customers with deals and direct delivery.

How grocery companies can make their last-mile deliveries more efficient and appealing
Fulfilling customer orders can be a tall order for many grocery chains, especially when requests are coming in at high volume. There are some tips and tricks however that could help organizations modify their stores and practices to accommodate e-commerce while still pleasing their traditional brick and mortar customer base.

The first thing to consider is setting standards for delivery packing. Customers receiving damaged goods or bruised fruit will blame the organization that brought it to them — ultimately negatively impacting brand recognition. Ideally, an organization will have standards and practices that minimize the risk of this happening, leaving fresh  groceries at the front door.

Some larger grocery chains have also been considering changing their store layouts. As Supply Chain Dive reports, some grocers moved their fresh sections to the front to preserve a sense of freshness and personality, while they push aisle products. Heavily shopped items however, get moved to the margins of the store in order to ease fulfillment while hiding the visual of large crowds. Other chains have focused more on shopping efficiency, creating zones in larger flagship stores that act as shoppable de-facto warehouses that host their most frequently bought products - reducing crowing and speeding up item procurement.

The world of grocery shopping is changing and stores have to be prepared to change with it. Whether it's a small store implementing its first online ordering system staffed by internal people, or a large chain that works with technology companies to create massive ordering systems, there is a sea change in how people interact with stores.

With a semiconductor shortage ongoing and the United States getting most of the semiconductors it uses from overseas markets, lawmakers earlier this year introduced the CHIPS Act. The CHIPS Act aims to free up approximately $52 billion in federal funding to spur more domestic production of the chips that are used in just about every consumer technology imaginable.

But with both houses of Congress still struggling to reconcile their respective iterations of the proposed bill, two leading semiconductor manufacturers say they'll have to table their ramped-up production plans until Capitol Hill hammers out a solution.

One of those companies is Intel, which in January, announced its intentions to build two semiconductor factories near Columbus, Ohio. The expectation was to begin construction in July, but as The Washington Post reported, the project will be suspended indefinitely because of insufficient funding, citing comments from the company's spokesperson.

"As we said in our January announcement, the scope and pace of our expansion in Ohio will depend heavily on funding from the CHIPS Act," said William Moss, spokesperson for Intel, in an email to the newspaper. "Unfortunately, CHIPS Act funding has moved more slowly than we expected and we still don't know when it will get done. It is time for Congress to act so we can move forward at the speed and scale we have long envisioned for Ohio and our other projects."

Legislative quarreling is placing a hold on semiconductor plant construction.Legislative quarreling is placing a hold on semiconductor plant construction.

Another semiconductor company that has tied its factory development plans to the CHIPS Act's implementation is GlobalFoundries, a rival semiconductor manufacturer based in Malta, New York. In a statement obtained by Construction Dive, the company stated that while the project is poised to begin on schedule, the actual timetable will largely be influenced by government investment, among other considerations.

What is the hold-up?
What the Senate and House of Representatives appear to be at loggerheads over are some of the bill's earmarks and provisions. For example, as Reuters reported, the Senate's version of the CHIPS Act includes an additional $200 billion for scientific and technological innovation to better compete with China, the world's leading producer. The House's version of the CHIPS Act is close to 3,000 pages in length and has several trade proposals that the Senate's doesn't mention.

Other leading chip manufacturers, however, aren't letting the lawmakers on Capitol Hill influence their building plans. As the Austin Business Journal reported, Samsung recently chose Yates Construction to head up construction for the company's $17 billion chip production plant near Austin, Texas. Texas Instruments, meanwhile, just broke ground on a $30 billion facility in Sherman, which is in Northeast Texas, as reported by Construction Dive. Both chip developers are confident that their respective projects should help bolster the semiconductor supply chain, as demand continues to far outpace supply. In 2021 alone, over 1.1 trillion semiconductors were sold globally, according to the Semiconductor Industry Association.