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Supply Chain: The Ache That Never Seems to Fade

Pressures Continue to Grow in the Ag, Logistics Industries

I am unbelievably excited to share this issue highlighting one of my favorite topics—the supply chain—with my fellow TMA community members. Experts from around the turnaround ecosystem share with us remarkable viewpoints that are not only insightful in the current environment, but also set the stage for addressing supply chain disruptions to come.

The broad term “supply chain” used day-to-day can feel tired and academic, because it’s often a catch-all for a wide array of concepts and happenings across the globe. However, even a superficial peek under the hood of any industry’s supply chain reveals a fascinating labyrinth of enterprises that endeavor to provide value to the next station on the track. In fact, the world regularly sees chokepoints or bottlenecks upstream that bring downstream businesses to their knees.

At any point in time, the supply chain for an industry may be humming along, all while supply chain segments in another industry are gummed up. It was only earlier this year that lumber supply began to straighten out, and ports seem to clog every few years. At the time of this writing, in early September, it remained to be seen how Yellow Corporation's collapse would affect freight timing and cost. On top of everything else, the double whammy of rising inflation and interest rates magnifies the negative impacts of what might otherwise be cyclical or foreseeable challenges. The short-term outlook promises to be nothing short of intriguing.

So, with supply chain being critical to many of our clients and forever subject to interruption, this edition’s authors walk us through timely issues and offer valuable ideas that empower us to help our turnaround clients indefinitely.

Brendan Flynn and Brian Phillips, both with Capstone Partners, introduce supply chain strategies that may be new to some folks in our TMA community. They describe how strategies deployed a decade (or more) ago have changed and remind us of the sizable advantages and pitfalls—taxes and tariffs, anyone?—associated with these strategies.

Kevin Sollows, an ABL portfolio manager at Cambridge Savings Bank, explores how providers of asset-based lending can play a major role in solving supply chain finance issues. In particular, his insight helps us understand how to put our best foot forward when asking an ABL to support a client’s cash-to-conversion cycle.

Elizabeth Aboulafia, a partner at Cullen and Dykman LLP, describes the alarming state of affairs in the construction industry. She outlines why fewer construction firms today are able to take advantage of bankruptcy reorganization and the key changes they should implement now—despite being in an industry that is often slow to adopt new practices.

Chris Lehnes, a business development officer at Versant Funding, provides an excellent recap of supply chain’s wide-ranging effects. He explains how factoring can serve as an effective solution for some enterprises facing supply chain difficulties, taking us through what clients should think about—and in turn, how factor facilities think about our clients—in the process.

Meg Ostling, a restructuring manager with KSV Advisory, and Stephanie Fernandes, an associate in the Restructuring & Insolvency Group at Cassels Brock & Blackwell LLP, share crucial insolvency concepts in Canada. They outline suppliers’ rights and break down how courts can help. This knowledge is critical for restructuring professionals worldwide as cross-border expertise is increasingly necessary.

Unfortunately, periodic supply chain disruptions are a fact of life for many of our clients, and it’s an unending challenge that requires evolving strategies. Sharing TMA collective knowledge about these issues helps ensure that the next time we go to the store, we can buy what we need… including toilet paper.

Jenna Birkhold

Jenna Birkhold

Accordion

Jenna Birkhold is a director in Accordion’s Turnaround & Restructuring Practice with nearly a decade of experience assisting small, mid-market, and large firms in identifying and remediating causes of underperformance. Birkhold earned an MBA from Babson College and a B.S. in political science from Arizona State University. She is a Certified Turnaround Analyst and Certified Risk Manager, as well as a member of the TMA Northeast Chapter’s Board of Directors and NextGen subcommittee.

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