Dealing With Supply Chain Issues
Supply chain issues can affect your manufacturing and distribution processes. These issues can disrupt your supply chain and negatively impact your workforce and public health. Pandemics, for example, can disrupt manufacturing and distribution processes, as well as disrupt your workforce, component supplies, and distribution. Fortunately, there are a variety of proactive measures you can take to address these threats.
Labor shortages
The effects of a labor shortage on a supply chain can be widespread. They can intensify inflation and cause supply chain bottlenecks. They can also prolong the time to complete a project, from placing an online order to completing a home renovation project. In a recent webinar, Peter Kusnic, Research Analyst at The Freedonia Group, discussed the causes and implications of labor shortages and how supply chains can adapt.
Economic shocks
Economic shocks can disrupt supply chains in a variety of ways. First, they can impact production in a specific region or industry. Second, they can impact the supply chains of customers and suppliers. Third, these shocks can have a large indirect effect on the entire economy.
Low inventories
With low inventories in supply chains, companies have been faced with a variety of problems, from poor logistics to delays in shipments. In a recent survey, 36 percent of small businesses said they experienced delays due to low inventories. As a result, they are having trouble meeting customer demands.
Pandemic
The impact of the pandemic on supply chains is evident. While the situation is improving in many areas, supply chain issues will likely continue for a year or more. In the early stage of the pandemic, the major challenge facing supply chain managers was transportation. During this period, the availability of sea freight services became the primary concern.
High shipping rates
While high shipping rates aren’t a new issue, they have become an increasing concern for supply chain managers. Carriers have faced a lot of volatility during the global recession, and have recently seen rates jump dramatically in the recovery. But the sudden rise in spot rates has left many businesses with high freight costs, which wipe out their profit margins – especially for lower-value goods. The only way to stabilize rates is to cancel shipments, but if rates stay high, they will trickle down to consumers.
China’s supply chain
China’s supply chain issues have become more than just a PR problem. According to Bloomberg, they are seriously affecting the global economy. With global demand for automobiles and electronics falling, China’s supply chain issues are jeopardizing the bottom line of multinational companies. For example, hospitals from Australia to the US are facing shortages of x-ray chemicals. Meanwhile, American construction projects are experiencing delays in getting materials.
