Another Year of Predictable Unpredictability

Happy 2022 and welcome to the 5th issue of The Supply Times! In this issue, I’ll discuss China’s new battle with a retail superpower, as well as examine some trends coming soon to a workplace near you.

Industry Highlights: The Middle Kingdom’s Royal Rumble

In what’s shaping up to be an epic showdown worthy of its own Pay-Per-View special, China launched a verbal attack on megachain Walmart last week, following claims the company’s China-based locations stopped stocking produce from the controversial Xinjiang region. The country’s anticorruption agency criticized Walmart for the move, calling it “stupid and shortsighted.”

Xinjiang has been the center of significant human rights concerns lately. The US and other countries have accused China of committing genocide against an ethnic minority of Muslims—which Chinese officials have vehemently denied. The US instituted a diplomatic boycott of the Winter Olympics in Beijing next month as a result, though athletes are still allowed to compete.

Walmart isn’t the first company to tangle with China over human rights. Last year, clothing companies H&M and Adidas both spoke out about the situation in Xinjiang, and the government responded by instituting consumer boycotts. According to The Wall Street Journal, Chinese officials removed all traces of H&M from its internet, including store locations on map applications. Both H&M and Adidas lost millions of dollars due to the boycott.

Intel found itself in a similar jam this week when it released a letter to suppliers stating their supply chain would not source goods or services from Xinjiang. The backlash was so significant that Intel formally apologized for the remarks, saying it was “committed to becoming a trusted technology partner and accelerating joint development with China.”

With consumers now expecting companies to take strong stances against political, social, and environmental issues, it will be interesting to see how megacorps like Walmart navigate the choppy geopolitical waters in China—its fastest expanding market. It’s clear China won’t hesitate to call out the big brands, forcing companies to pick a side. Do they speak up and endure China’s punitive regulations, or stay silent and risk being the target of moral outrage from the rest of the world?

The Future of Work - 2022 Trends

2021 brought sweeping changes to the workplace landscape, including an increase in work-from-home options and flexible hours. Experts believe more changes could be on the way. Here are a few:

• The new year always brings opportunities for reassessing life goals, and if one of your New Year’s resolutions is to land the dream job, this might be the year.With so many positions open right now, the chance of landing your ideal position is better than ever. Career coaches suggest making a list of all the things you want—and don’t want—in a job and using those attributes to aid in your search. By setting those parameters, you’ll increase your chance of landing a position that’s a good fit.

• Thinking about breaking up with your new company? It might be time to make up with that old flame.According to a recent Wall Street Journal article, an increasing number of workers are finding better pay and more flexible schedules by returning to companies they once worked for. These “boomerang” employees are great finds for businesses struggling to fill open positions because their prior knowledge makes them quicker to train.If you’re in a position where you need reliable talent fast, it could be worthwhile to reach out to employees who have recently departed. They might just reach back.

• In the wake of The Great Resignation, companies are earmarking an average of 3.9 percent of total payroll for wage increases this year, according to a recent report from The Conference Board. That’s the highest amount since 2008, when the Great Recession took its toll on businesses and workers alike.But don’t book that dream vacation just yet. One of the main reasons companies are setting aside these funds is inflation, so the rising costs of groceries, rent, and fuel will likely offset any real gains.That said, these earmarked funds do indicate that companies are willing to invest more in their employees, meaning it might be time to ask your boss for that raise you’ve been hoping for. Here’s a recent Wall Street Journal article that offers tips on making a strong case for more money.

The Supply Aside: What I’m Reading, Watching, Listening to, and Thinking About

RE: Supply Chain, Work, and Beyond

• Read: Our current superhero fixation notwithstanding, there’s a refreshing book called The Hero Code that I highly recommend. Authored by the renowned Admiral William McRaven (famous for leading the 2011 raid on Bin Laden’s compound), in this book he covers the lives of real world heroes and lessons learned through lives well lived.This short and crisp read is centered around 10 themes: courage, humility, sacrifice, integrity, compassion, perseverance, duty, hope, humor, and forgiveness. It’s authentic storytelling from one of our finest leaders. 

• Watch: I’m really interested in watching the most recent ISM numbers. The PMI expanded at 58.7, due mainly to the supply/demand balance transition. Experts will be keenly tracking how big a factor the Omicron variant is as we head into Q1. Demand expansion is also continuing at slower rates, with new orders down 1.1 points to 60, new export orders down 0.4 to 53.6, backlog up 0.9 points to 62.8, and customer inventories up 6.6 points to 31.7.The consumption numbers show signs of labor improvement for the fourth month in a row, with production at 59.2 and employment at 54.2.Even though demand remained at high levels, the rapid pace of the current variant spread has caught many business executives by surprise. In the coming months, it’s expected to impact employment and absenteeism across the supply chain.

• Listen: Coinbase CEO Brian Armstrong recently visited the NPR podcast How I Built This, and I was floored by his story of building one of the largest cryptocurrency exchanges in the world. Crypto is still being criticized by the mainstream as nothing more than volatile Monopoly money, but with its user base expanding—several NFL players were paid in crypto this year—it’s following a growth trajectory similar to what we saw from the internet 30 years ago. With a $6.5 billion estimated net worth, I’d say he’s on to something.

• Think: After years of battling foreign competitors, General Motors was finally dethroned as the top-selling automaker in 2021, ceding its crown to Toyota. The Japanese company increased its sales by 10 percent last year, compared to a 13 percent dip from GM.The primary reason can be attributed to the chip shortage that hamstrung all automakers last year, but even if GM can reclaim its title in the coming years, experts agree the writing’s on the wall. “The dominance of the US automakers in the US market is just over,” University of Michigan business professor Erik Gordon told the New York Times.It’s an interesting shift in trends I think suggests American consumers are no longer as allegiant to US auto manufacturers as they have been for nearly a century.

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