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Supply chain mess: MRU alumni feel the stress

From underwear to industrial equipment, no sector has been immune to challenges


When alumnus Bryce Mapletoft, TC Energy’s senior manager of Canada operations — supply chain, recently had to replace a compression station’s stainless-steel exhaust system, his team discovered that in one month its cost had nearly doubled, from $715,000 to $1.3 million.

Alumna Dayna McCombs needed to move underwear and socks by air cargo from China to ensure the product reached Canadian retailers in time for the Christmas shopping season, doubling her usual costs via container ship.

While their problems sound very different, the two MRU alumni were facing similar core challenges: the dreaded global supply chain woes that have festered since the start of the pandemic.

Bryce Mapletoft

While Mapletoft, a graduate of the Bachelor of Business Administration — International Business and Supply Chain Management program (2007) deals in logistics every day, McCombs, a Bachelor of Communication — Information Design (2004) graduate and her husband, Tyler, were not supply chain savvy when they launched their apparel company, Devon + Lang, in 2019.

Dayna and Tyler McCombs

Devon + Lang’s premium boxers, briefs, socks and face masks are designed in Canada but manufactured in Fuzhou, China. Shipping challenges forced the McCombs’ to learn more about logistics than they ever wanted to know.

“It’s been a huge learning curve, dealing with the shenanigans up and down the line,” Tyler says.

A witch’s brew of factors

The reasons for sparse store shelves, products going AWOL for months at a time, and why seemingly everything is more expensive are numerous and well-documented: among them was the massive container ship that got stuck sideways in the Suez Canal for six days in March 2021, snarling progress for at least 350 other vessels. Add to that a fire at a key microchip plant in Japan, long waits to unload container ships at terminals around the world, severe weather events such as the recent B.C. floods that cut rail and road links between Vancouver and the rest of Canada, and it’s a witch’s brew of factors that have made things either harder to get, more expensive or simply unobtainable at any price.

A recent Canadian Federation of Independent Business survey highlighted that supply chain challenges were the single largest concern among respondents in the wholesale (84 per cent), construction (80 per cent) and retail (78 per cent) sectors. Additionally, 31 per cent of respondents reported the shortage of products and materials was impacting their sales or growth ability.

“A lack of skilled labour is also a large contributor to the ongoing supply chain issues,” says Kevin Read, a Bachelor of Applied Business and Entrepreneurship — Small Business (2004) graduate and CEO of Nomodic, a Calgary-based provider of integrated modular and hybrid building solutions, including residential, commercial, and hospitality facilities across western Canada.

“Our partners are having great difficulty filling entry level positions due to COVID. Demand for building products has gone up, while availability and capacity have gone down.”

Kevin Read

Overdependent upon “just in time”

“Some of today’s problems were actually solutions to supply chain challenges 60 or 70 years ago,” says Dr. Rajbir Bhatti, PhD, an associate professor of international business and supply chain management at Mount Royal’s Bissett School of Business. “With ‘just in time’ delivery, there was no need to hold excessive inventory. But, we came to over-depend on ‘just in time’.”

Bhatti says another culprit is the length of those supply chains. “When you require multiple factories across different continents to manufacture your jacket or your car, that’s not very resilient,” he says. “A vehicle might comprise 9,999 parts you have on hand, but if it’s missing a microchip, you cannot sell the car.”

Professor Rajbir Bhatti

Similarly, an Apple iPhone sources components from more than 2,000 suppliers in 43 countries, giving credence to a saying Mapletoft uses, “A supply chain is only as strong as its weakest link.”

Bhatti also blames a lack of what he terms “end-to-end supply chain visibility.” A hypothetical example, he says, is a business that has two different vendors, one in Lethbridge and another in Mexico. If one vendor can’t deliver product, normally the second one will. But end-to-end visibility is only revealed when it’s discovered that both vendors are getting their goods from the same source in China, and that factory suffered a shutdown.

“We thought we had supply chain resilience but, in reality, the chains are all connected and often go back to the same country, or same manufacturer,” Bhatti says.

He cites a recent study that reported more than 40 per cent of Fortune 500 companies had direct or indirect supplier operations in Wuhan, China, which became a massive, global issue when those factories shut down due to COVID-19.

“While importing our apparel became a nightmare,” recalls Devon + Lang’s Tyler McCombs, “the problem didn’t start with getting the product from China to Canada.” A coal shortage in China caused factories to shut down, he says, and while Devon + Lang’s manufacturing facility was unaffected, “some of those supplying materials to our manufacturer had been shut down, so we felt the trickle down.”

While Mapletoft says TC Energy has “a much less complex problem to solve” relative to many manufacturers, the energy giant still feels supply chain stresses in a number of ways. Beyond the higher costs for industrial items — such as the $1.3-million exhaust system — Mapletoft and his team are ensuring they have the right critical spare parts in inventory, and working with the business unit on planning, all while protecting the integrity of TC’s critical production and distribution network so nothing disrupts the energy supply.

“We’ve seen significant cost increases and lack of supply for many commodities which have had a huge impact on our ability to maintain our assets at the lowest possible cost. That’s been a really interesting dynamic to work through,” Mapletoft says.

Watch for a follow-up story soon in Always Blue on how MRU alumni at Alberta businesses are building supply chain resilience, and how MRU programs can help.

— Matthew Fox