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  • Writer's pictureKimberly Reuter

The Two…No Three Principles of Supply Chain

Well, well, well…here we are again. It’s peak shipping season, capacity is restricted, and container costs are climbing.


Sound familiar?


Importers are scrambling! Hard!


With the same plays, they have run forever – Capacity and Speed.


Yep, those old diehards.


These two principles have served us well: Secure as much capacity as possible at the cheapest price, and if you need it cheaper, slow boat it.


But…


These alone don’t work anymore. Long gone are the days of honored contracts and steady rates with mild fuel surcharge increases.


Do you remember those days? When an entire corporate office would melt down over a 1% fuel surcharge increase.


Those were wild times. I have never seen so much adult crying.


But today…capacity and speed do not work alone.


Today, we need a third principle – FLOW


Now, you “Lean” people already know…for the rest, let me explain.


Flow is the ART of managing just-in-time inventory—no more 6-month supply in one shipment. We ship what we need when we need it.


If flow sounds complicated, it is. I will not sell you a dreamy picture of glistening flowing rivers of inventory.


Flow breaks corporate structure.  It enrages tax.  The customs team may never forgive you. And the merch team will never ever invite you to a swanky event again.


But!


Flow will free up capacity It will reduce overhead. And it will lighten inventory costs.


Ultimately, it will give the company the flexibility and predictability it needs to survive these modern supply chain times.


So go on…go get your flow on.



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