If you are a manufacturer, you’re probably pretty familiar with supply chain disruptions. But even if you’re a retailer, a supply chain disruption can have a lasting impact on your business.
In this post, we’ll discuss the common causes of supply chain disruptions and how to prevent them with tools like Pillir.io.
By learning about supply chain disruptions, you’ll be better prepared to deal with them in the future.
Causes of supply chain disruptions
1. Pandemics
In the past few years, it is evident that the covid 9 pandemic has greatly disrupted supply chains globally. The pandemic affected supply chains massively because many people were affected and therefore making companies less productive and therefore affecting production.
The pandemic also led to many countries closing their borders to other countries since it was believed that movement encouraged the risk of the spread of the virus. Therefore, due to limited movement, global supply chains were disrupted.
2. Natural disasters
Natural disasters such as extreme weather, earthquakes, wildfires, and tornadoes cause a disruption in the supply chain. They make it difficult to access certain areas where raw materials are acquired or where certain products are needed.
Natural disasters may also cause the production of commodities to stop since industries in the affected areas may be destroyed or be forced to close in order to protect the welfare of the workers.
3. Transportation delays and failures
As technology grows, the world keeps becoming smaller and dependent on each other. It makes it easier for different countries to conduct trade and therefore increases the global supply chain.
Increased trade leads to increase opportunities which require a network of movement to ensure everyone’s demands are met. This may cause a strain on the networks due to congestion which can cause delays or even failures in the supply chain.
Transportation is the main avenue for raw materials to reach industries and for finished goods to reach the customer. Therefore, slight delays or failures cause a major disruption in the supply chain.
4. Product quality issues
For the supply chain to be flawless the goods produced should be of high quality or at least be satisfactory to the customer. Issues with the product may cause delays since they do not mean the standard requirement or mean that the product will be returned which may disrupt the supply chain.
5. Price fluctuations
Price fluctuations affect the rate of production. When the prices made by suppliers fluctuate, it affects production since many decisions have to be made to ensure that profits are maintained.
The time taken to make these production decisions or the time taken to switch suppliers can cause delays and therefore disrupt the supply chain.
6. Cyberattacks
Technology keeps growing very fast meaning even criminals are coming up with new and more intelligent ways to infiltrate your business. Weak security protocols leave loopholes that workers can access and therefore disrupt the supply chain.
Unauthorized access to data from one link of the chain can affect other links which can cause major damage and disrupt the supply chain
How to prevent supply chain disruption
I. Create a supply chain emergency plan
Creating an emergency plan ensured that goods reach their desired destination even if a disruption in the supply chain occurs. The backup plan should consist of alternative ways in which the chain can still run. To make this possible you should consider coming up with an emergency budget to facilitate the plan.
II. Build up an inventory
You should have a stock of what is most essential to your business in the case where the supply chain is temporarily disrupted. The inventory should be enough to sustain your business for several months. This ensures that even though there is a disruption in the supply chain, your business can still run as usual.
III. Identify backup suppliers
You should create good relationships with other suppliers outside your regular ones. This ensures you that you can still get a supply of the products you need even if your main supplier happens to inconvenience you.
IV. Conduct a chain vulnerability audit
You should regularly conduct an audit on your supply chain to identify the weakest links of the chain. Identifying the weak part of the chain enables you to find stand-by replacements so that the supply chain can still work even when the weakest links are affected.
It is also important to assess external factors that may affect the supply chain and try to seek solutions to ensure you are still running when it hits.
Having a working supply chain is bliss. However, disruptions are bound to happen once in a while from the article you can find some of the common causes of the disruptions and what you can do to prevent them.
