Supply chain interruptions are not all made equal. Supply chain interruptions come in a variety of forms. When looking at a disrupt, there are 2 factors to consider: “What is the likelihood, and what is the intensity?” Based on your distribution chain and industry, this will vary.
Here are a few reasons why your supply chain can be affected.
Pandemics.
COVID-19, a unique coronavirus pandemic, has had an influence on global supply chains for weeks and months. Because of the large number of individuals, countries, and worldwide businesses affected, the repercussions of global pandemics or other global health crises can disrupt routine operations at each and every stage of the manufacturing line.
Natural catastrophes.
An earthquake happened off the coast of Japan on March 11, 2011, producing a tsunami and a nuclear accident at the Fukushima Daiichi Nuclear Power Plant. Many industries and the worldwide economy were impacted by the disaster, with 22 percent of the world’s supply of 300-millimeter silicon chips (a vital component in semiconductors) and 60 percent of certain automotive components being temporarily shut down.
Natural disasters such as this one, as well as hurricanes, tornadoes, wildfires, and floods, frequently bring more attention to supply chain linkages in the impacted areas. Based on where it occurs, even a small tragedy might have far-reaching repercussions in the supply chain.Therefore, it is always a good plan and a rule of thumb to know how to manage your freight during a crisis.
Delays and failures in transportation.
Supply chains with overseas providers are becoming more widespread as a result of globalization and expanded trade. As a result, there are more economic prospects, but there is also more demand on domestic and international transportation networks, causing bottlenecks and disruptions.
While transport delays can occur at any time, other supply network interruptions can exacerbate the situation. Natural catastrophes, for instance, might disrupt transportation and commercial routes across affected areas.
In the case of the COVID-19 pandemic, several governments and areas have implemented lockdowns to prevent viral spread, making it even more difficult for freight companies to carry commodities by sea, land, or air, slowing the transit of even essential supplies.
Product issues.
Quality control and supply chain control work hand in hand since problems with products at any point in the chain may lead to problems and inefficiencies in the end product. No company wants to provide subpar stuff to clients or have deliveries delayed due to faulty goods, so establishing a robust quality control system based on customer standards and conveying it to all suppliers is critical.
Variations in price.
Price fluctuations at your chain’s vendors might also cause problems because you’ll have to decide whether to switch vendors, boost your own rates, or cut your profits by covering the costs yourselves. A variety of variables might influence price variations. Commodity prices, for instance, are famously variable and can have a significant impact on the economic costs of a variety of production and transportation elements.
