Management

Why Supply Chain Disruptions Occur and How to Prevent Them

Business Advice | 22 March 2023 | 1 year ago

Regardless of the industry that you work in or the products that you manufacture, there is a high chance that you rely on a supply chain. The supply chain follows materials through every step of the manufacturing process, from raw materials to the finished product, and it includes every stage of getting a finished product to your customers. But, what do you do when a disruption happens?

What are the Effects of Supply Chain Disruptions?

It’s important not to underestimate the effects of supply chain disruptions, as it’s not simply a case of materials arriving slightly later than expected or customers receiving orders a day or two late. Even the smallest supply chain disruption can have a huge knock on effect for everyone involved, and it can lead to everything from missed deadlines to you running out of storage.

Upset customers are also a possibility, some of which might even go as far as to cancel their orders entirely. Supply chain disruptions also put you at risk of shortage of goods, price inflation, unloaded materials and negative reviews.

How They Occur –

Poor Planning

There are a lot of reasons for supply chain disruptions to occur, many of which are caused by poor planning. If you take the time to plan and organise your supply chain correctly, you will reduce the risk of disruptions and errors. You should ensure efficiency and identify any potential risks, and then put solutions in place for unexpected events.

Making sure you have adequate resources and excellent staff management also make a big difference, which is something that KFC found out when they were faced with a chicken shortage at multiple sites in 2018.

Unforeseen Events

Of course, there are many events that you can’t plan for, and some supply chain disruptions are out of your control. A range of global and local events – including war, sanctions, blockades, strikes and resource shortages – can lead to problems with your supply chain. For example, the Suez Canal blockage of 2021 delayed a lot of materials from arriving at their intended destination.

How to Prevent Supply Chain Disruptions

Thankfully, there are ways to prevent supply chain disruptions. Automating as much as possible is an example of this, and it reduces the chance of you running low on materials or falling behind on shipping. Improving software, flexibility, planning and fallback plans also reduce the chances of a supply chain disruption.

 

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Topic

Management

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