How big of a Hurdle is Supply Chain Disruption for Industries?

A supply chain is a series of steps through which a product or service goes through, before reaching its final destination. Theoretically, the steps involved from the procurement of supplies and materials, to the manufacturing of a good and finally reaching the retailer, are collectively called supply chain. As the businesses have evolved through the years, so have the supply chains. The more expanded the business, the more complex the process of procuring supplies and making them into a final product/service, hence the more tedious the supply chain. Taking into account the operations that take place on each step is not just hard, but also intricate. The procedure of allocating funds, planning, executing, and supervising these operations requires not only a focused workforce but also ample resources, time, and management strategies. These production chains have evolved a lot through the decades, because of market revolutions, ever-changing consumer behaviors, and advancements in technologies with every passing day.

There are many parties involved in a supply chain process, depending upon the type of product or service being made and delivered. In the case of products, the parties involved are raw material suppliers, manufacturers, vendors, warehouses, distribution centers, and finally retailers. Every step is critical, as multiple procedures are carried out per step to deliver the final product. Any failure or mishap at any step can prove problematic for other supply chain participants. The more cohesive the chain, the better the functioning of the business as a whole, considering that the product delivered is the nucleus of profit generation.

Given that today’s industries have a plethora of technologies and forecasting strategies to benefit from, the question arises: Why do supply chains still face disruptions? Here are a few answers:

1. Changes in Consumer Behavior: 

The foremost reason why supply chains need constant customization and modifications if the changing demands of consumers. Today, almost every supply chain is getting complex and webbed, thanks to the needed amendments at every step of the production process. An example is clothing apparel, where customers want everything from dull tones to full bright colour schemes; every fabric type and attire variation needs a different procedure for raw material acquisition and manufacturing. Change and fashion have penetrated in every industry now from telecom to home décor. Hence the more customization required, the more disturbances at every step of the supply chain.

2. Spacing issues: 

As the population is increasing, so is the production requirement. The production units of almost every manufacturing industry have doubled as compared to that of 25 years ago. When operations at one step augment, all the other steps are supposed to speed up to avoid any supply chain disturbance. Unfortunately, spacing in warehouses is sometimes not enough, leading to wastage of products and resources eventually. Many products have smaller shelf lives or need specific circumstances such as low temperatures and special care instructions etc. When a product-specific atmosphere is not available, production units need to slow down leading to the slowing of raw materials and the overall breakdown of supply chain.

3. Transportation Hassles: 

Another hitch in the production chain is the mounting costs of transportation and trade barriers. Due to political instabilities and war situations, cargoes and ports have suffered plenty of restrictions and so transportation and freight charges have increased to a large extent. All these hurdles pose threats to effective transportation leading to disturbances in supply chain management. Development in infrastructure and roads has eased supply chains globally but transportation through other means has surely seen problems due to the above-mentioned factors.

4. Equipment Unavailability/Shortage: 

Equipment today is not only costly but difficult to repair and maintain. Many industries today rent out giant machinery and return once projects are completed. This leads to huge licensing fees and under or over-usage of licenses leading to extra charges. Due to these factors, sometimes equipment is unavailable or faulty, leading to a slowing down of the whole supply chain. To cater to the mounting requirements of the supply chain, a plethora of new and better equipment is needed globally, with timely repairs and economical renting fees.

What Can Be Done?

1. Contingency Plans: 

Risk is evident in every business operation, be it manufacturing, retailing, or acquiring materials. Supply chains can be modified and amended if the right contingency plans are developed beforehand, to minimise any wastages and shortcomings. Proper strategies for building alternative buyer-supplier relationships should be set, and other short and long-term hacks should be put to use through careful insight. These contingency plans depend solely on the type of industry the supply chain operates. Every industry would have peculiar strategies to cope with production chain problems.

2. Coping Up With Transportation Bottlenecks: 

Transportation hurdles need to be handled very wisely because the whole supply chain is dependent upon the timely transportation of products and services globally. Today, techniques like port monitoring, port optimization, maritime tracing, and informatics are being developed that would take time but eventually provide accurate information about containers and inventory being transported through roads and water. The supervision would be tedious as it is difficult to track down millions of containers through a single route, still, it seems the only solution to cover transportation bottlenecks.

3. Avoiding Surplus and Shortages: 

To know which products and services are available in surplus and which products are facing shortages in the market, inventory tracking software should be used. Through such software, you can effectively detect which products need more manufacturing, and which ones need a pause or halt in production. This would lead to the elimination of any shortages or abundance in the market leading to healthier supply chains in the long run. These software are provided by service providers so manufacturers can outsource them and ease their inventory hassles.

Supply chains, though difficult to manage, are the backbone of any business. A strong supply chain indicates a profitable business and so efforts should be made by industries worldwide to curtail these hitches.