Like most companies, Republic Services has felt supply chain challenges in availability, cost and transportation. A big thank you to Andrea P., Director of Supply Chain Management, Procurement, for taking time during Maintenance Awareness Month to address supply chain issues and how her team is keeping our trucks and heavy equipment moving.
Q: We all know that the cost of just about everything is going up. How is your team managing the rising costs and shortages of goods to keep up with demand?
A: Even with higher pricing, we have trouble getting goods where we need them. We are ordering more in advance and leaning on the strong relationships we have built with our suppliers to direct more of the scarce materials in our direction.
- Availability: We have had to work with alternative suppliers to secure goods when our primary supplier cannot meet our business’ typical demands. Lead times for materials are also much longer.
- Cost: There are considerable headwinds in pricing. The prices of raw materials and labor have gone up significantly for our suppliers and demand is still there. Historically, we see negotiated annual increases. We are now seeing considerable increases during the year and significant increases in the way of surcharges. We are working with our finance and field partners to prepare them as much as possible for these cost changes.
- Transportation: With high fuel prices and labor shortages, we have seen longer than usual lead times for transporting goods. We have considered that when planning and communicating delivery dates to the field and stakeholders. Transportation costs also impact all aspects of production for the materials we try to procure.
Communication is key. We have tried to keep communication open and active with as many people that we support as we can. We are looking for alternative suppliers and even leaning on the field when they can source locally. We strive to ensure that all our teams get what they need in time and do not impact the business. Planning is more important now than ever. The procurement team needs to know as much as possible about what is coming for growth and volume changes so we can start planning early.
Q: What can we all do to support Procurement Team’s efforts?
A: Speak up! Let us know if there is a pain point we don’t know about. We learn so much from what we hear in the field. We may not know that you are having problems getting a good and are managing painfully through it. If you bring it to our attention, then we have an opportunity to address it and make it better.
Q: Lastly, what’s working well and what are some lessons learned in a supply chain constrained world?
A: We have a lot of wins! Here are a few examples:
- Trucks Team –The trucks team has worked with our suppliers to secure additional assets in advance orders to help with the longer-than-usual lead times.
- Fuel Team – Keeping a pulse on the market and buying in ways we haven’t before. We have been buying in advance and working with our strategic partners to keep a pulse on the market and make strategic moves rather than reactive ones.
Thank you, Andrea, for these insights on the current supply chain issues!
