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Supply Chain Issues to Tackle in 2024

Suppliers will remember the pandemic years as a time of supply chain stress, marked shutdowns and slowdowns, long waits at ports, high costs, and labor strife. The pandemic didn’t directly cause all of these issues, but as was the case in so many aspects of society, it made them worse. Small problems became big ones, and changes that seemed five years off came much more quickly, like B2B’s shift to doing business online.

The worst of the pandemic-era supply chain issues are likely to ease in 2024, but some issues will remain. Successful suppliers will be the ones who find ways to cope with labor shortages and rising costs and look to implement sustainability initiatives and gain third-party certifications.

Controlling Costs

The jewelry industry knows something about the costs associated with globe-spanning supply chains. When your industry depends on worldwide cooperation, geopolitical instability often leads to uncertainty and higher costs. The same is true of the oil industry. While we experienced a sharp decrease in oil prices in the last quarter of 2023, falling from about $93/barrel in October to $69/barrel in mid-December, we are likely to see an increase in oil prices in the first few months of the year.

With Russia’s war with Ukraine entering its second year, discord in the Middle East, rising tensions between the US and China over Taiwan, and Venezuela’s threats against oil-rich, underdeveloped neighbor Guyana, we are living in a time of increased global instability that could spell trouble for global trade networks and lead to higher oil prices.

The long-term outlook for oil is much better, however, as prices are expected to fall overall in 2024. Still, we saw prices increase suddenly for a brief period last month when Houthi attacks on shipments in the Red Sea briefly halted shipping in that area. Other such unpredictable events could have similar effects on oil prices in 2024. Extreme weather events can also have a negative effect on US oil production. El Niño has already brought warmer, drier conditions to the US, and its effects will likely continue through summer 2024.

In the face of unpredictable energy costs, businesses must do everything they can to control their gas bills. Keeping vehicles maintained and optimized for fuel conservation and using lightweight packaging are two simple steps B2B businesses can take. Keeping your sales staff off the road can also help. A custom B2B app is just the jewelry industry technology you need to get your staff communicating quickly and more efficiently with clients.

Labor Shortages

Directly related to high costs is the issue of labor shortages. When fewer workers are available to complete a task, the task takes longer and costs more. Driven by the social changes wrought by the pandemic, nearly 100 million Americans quit their jobs between 2021 and 2022, leaving many businesses with holes to fill. At the same time, the high interest rates the government is using to slow inflation makes hiring and expanding business operations difficult. Demographics are also at play: there are fewer Gen-Z Americans than Millennials, fewer Millennials than Gen-X, and fewer Gen-X than Baby Boomers. As Boomers retire—and many retired early during the pandemic—there just aren’t enough people to fill their roles.

Sustainability and Climate Change

Sustainability and responsibility are differentiating factors for retail businesses. In the jewelry industry, this means transparent supply chains, sustainable practices, and responsible sourcing. As consumers demand greater social consciousness from the businesses they patronize, retailers will search for suppliers with similar environmental and ethical attitudes.

Anyone can make sustainability claims, and many businesses have been doing so without any substantial proof to back it up. This has led the industry to call on the FTC to crack down on unsubstantiated sustainability claims. In 2024, it will be important to be that responsible B2B organization that retailers want to work with, and it will be important to be able to back up those claims. Third-party certifications are the way to do that. Fairtrade, Fairmined, SCS Global Services are among the leaders in third-party certifications. These organizations bring legitimacy to any business’s responsibility claims and ensure the public that you are doing your part.

Things Will Get Better, But Prepare for Unpredictability

While the nightmare of the pandemic is behind us, 2024 won’t be all smooth sailing. You’ll still need to make quick decisions based on data and your own judgment and experience in running a B2B organization. Working with a diverse network of manufacturers, retailers, and delivery services while staying on top of industry trends and deploying the latest jewelry industry technology will help you stay strong through whatever 2024 has in store.