Unreliable Supply Chains

As 2022 gets rolling, the concept of orders not arriving on time is very familiar. Amongst the many challenges brought on by COVID-19, supply chain issues have persisted and are likely to continue for the foreseeable future. In order to weather the storm, organizations are finding innovative ways to collaborate and increase transparency with suppliers and logistics service providers.

Challenges surrounding labor shortages, supply and demand imbalances, and international cargo shipping are predicted to continue. According to a study conducted by the Wall Street Journal, experts expect it will take until the latter half of 2022 until we begin to return to normal. Because of this, the quality of resilience will be important for many companies this year.

How will supply chain issues impact fleets?

1. Increased Costs: The cost of vehicles may grow as much as 20%, microchips are in great demand, and the cost of materials for upfitting such as steel and plywood are increasing too.
2. Less inventory: Anyone who has passed by a dealership lately can see that the lots are pretty bare. Fleet managers cannot rely on excess inventory at dealerships.
3. Reduced manufacturer incentives: With unprecedented demand, manufactures have little to gain by offering rebates.
4. Increased need for vehicle maintenance: Fleet managers are keeping their vehicles for much longer periods of time, and keeping vehicles in good working order should be a top priority.

It will be crucial for organizations to identify their most important materials and products and where to keep them stored during this time. Managing inventory quantities will also be crucial as supply and demand continue to fluctuate during the year. Supply chain management, now more than ever, is essential for business’ survival.

In order to help mitigate the issues that will inevitably arise due to global supply chains, utilizing a trusted fleet management partner will be incredibly beneficial. Onward offers a variety of service packages in order to help businesses operate fleets as efficiently as possible, including innovative ways to increase logistics efficiency and transparency.