Stop, Look, Listen
We all know the best way to approach an unguarded railroad crossing is to stop, look, and listen. That same advice applies when examing the economy, which will likely roar through 2018 at full speed. While it is tempting to climb aboard and enjoy the ride, that is the exact wrong approach from a supply chain or logistics improvement perspective.
Many companies and sectors have reported growth during the past few months of 2017. IL's recent research focusing on the trucking and 3PL sectors, both leading economic indicators, shows that trend will continue.
Those aren't the only sectors posting growth. Recently released manufacturing stats covering Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Oklahoma, compiled by the Creighton University Heider College of Business, show:
- The overall index moved above growth neutral for an 11th straight month, pointing to solid growth ahead.
- Strong growth for durable goods manufacturers in the Midwest.
- Only one in five supply managers indicate NAFTA is important to company buying and selling.
- The Business Conditions Index hit 58.8, its highest reading in four months and up from 58.2 in September, indicating continued "growth over the next three to six months," according to the research.
- Economic optimism expanded to a strong 63.8 from 63.6 in September.
"Healthy profit growth, still low interest rates, and an improving global economy boosted the economic outlook among supply managers in the nine-state region," reports Professor Ernie Goss, PhD, director of Creighton University's Economic Forecasting Group.
Other studies show similar readings in the rest of the country. The U.S. private sector added 235,000 jobs nationally in October 2017, versus the 200,000 new jobs expected, according to ADP. All that economic activity means more jobs, more jobs mean more consumer spending, more consumer spending means more growth.
So, if you are lucky enough to be in a company experiencing growth, and expect the economy to roar right into 2018, stop, look, listen, and then reinvigorate your supply chain initiatives or expand your demand-driven logistics processes. Remember, there will come a day when the roaring sound fades into the distance. If you prepare now—while you are flush—and invest in people, processes, and solid gain-sharing vendor-to-customer relationships, you'll be well positioned as you wait for the next growth train to approach your crossing.