6 Unforeseen Factors That Could Disrupt Your Supply Chain—And How To Protect Yourself

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6 Unforeseen Factors That Could Disrupt Your Supply Chain—And How To Protect Yourself
27 Sep 2021
6 min read

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Despite the Covid-19 pandemic, its effects are still being seen across the supply chain, particularly in the food industry. From computer chips to patio furniture, there are shortages in a variety of industries. This causes order delays, increased consumer prices, and customer dissatisfaction. #ThinkWithNiche

Pandemics aren't the only thing that may go wrong with your supply chain. Even in normal times, companies must be prepared to deal with unanticipated events when working with overseas manufacturers. Your company's supply chain is not entirely in your control, but by understanding the threats it faces, you will be better prepared to go on with normal operations.

Factors That Might Interrupt The Supply Chain

1. The Use Of Innovative Technology

Because of modern technologies, there is a lot of opportunity for improvement in supply chain efficiency. When vendors and suppliers are at various levels of this technology's acceptance, the introduction of this technology may cause disruptions. According to McKinsey's research on supply chain trends, for example, automation and robotics will have the greatest impact on supply chains in the coming months and years. If you want to keep your supply chain running smoothly, you should adopt these technologies as quickly as possible and encourage others to do the same. Changes in organizational structure are frequently required to incorporate new technology, which may disrupt employees' daily routines. In-depth training may ease the onboarding process for a smoother transition.

2. transportation-related issues

Transportation delays have become a major supply chain problem as a result of the Covid-19 outbreak. Containers, for example, are forced to wait at port for weeks due to fresh outbreaks, rather than being processed in less than a day. Transparency is essential for all organizations, but it is especially critical for companies shipping fragile or sensitive items. Performance management systems such as Logmore seek to tackle this problem through improved data collection throughout the shipping process. Not only are shipments tracked by location, but also by temperature and humidity. By detecting bottlenecks and inadequate transportation circumstances, brands can improve delivery quality and protect their products.

3. Nature-caused Disasters

Natural disasters may create significant disruption when a company's supply chain is mainly reliant on a particular geographic location due to a fire, storm, or tornado. The Associated Press recently reported on how Texas' record-breaking cold damaged the outdoor furniture industry. Due to the impact of the weather catastrophe on the electrical system, two businesses that manufacture foam used in outdoor furniture had to shut down for many weeks. As a result, the foam was in short supply. By the end of the summer, levels had not returned to normal. This is an example of why it is critical to have a diverse set of vendors and manufacturing partners. When these unavoidable interruptions occur, using several suppliers can help businesses avoid losing customers.

4. Price Adjustments

There's no getting around the fact that apparently, unrelated pricing adjustments may wreak havoc on a supply chain. One of your suppliers, for example, may raise the price of a crucial component utilized by your firm. Crude oil prices, for example, can have an immediate impact on transportation costs. A single pricing modification that has a cascade effect on your company's supply chain can have an impact. Finally, businesses must decide whether to raise their prices on their own, shift suppliers, or suffer a temporary decrease in earnings by keeping things the same. In recent months, a common trend has been "shrinkflation," in which businesses sell products at the same price but in fewer quantities. As a result, businesses must assess if pricing adjustments are temporary or indicative of a long-term shift. Profit margins must be balanced against the impact of future decisions on customer loyalty.

5. Sudden Increases In Demand

In 2019, customers worried, and toilet paper shortages affected the whole supply chain in the United States. Even though this is an extreme instance, unprepared businesses might find themselves in this predicament. Other factors, such as seasonality, industry trends, and even product cannibalization, may influence demand for a company's products. In addition to following industry trends, the use of demand forecasting techniques such as Net stock may assist businesses in gaining a better knowledge of the demand for their products. By utilizing real-time and historical data insights about your inventory, your company can better plan for variations in demand.

6. Cyberattacks Pose a Threat

As the supply chain digitizes, cyberattacks are becoming more prevalent. Even if you have all of the latest digital security measures in place, hackers may still get access to your network. Target's breach in 2014 is arguably the most well-known example of this. A Target HVAC partner gave hackers information that they used to obtain access to the personal information of nearly 70 million of the chain's customers (including over 40 million credit and debit cards). Last year, the Colonial Pipeline was hacked, resulting in significant fuel shortages on the East Coast. Business leaders would be prudent to consult with their supply chain partners to guarantee the safety of individuals with whom they operate. Anyone that prioritizes cybersecurity in their supply chain reduces the risk for everyone.

You Do Not Influence Supply Chain Interruptions.

Having total control over your company's supply chain is tough. We must confront the fact that we cannot control the weather. You have no means of knowing what's going on at a partner's manufacturing plant. Consumer preferences are something over which you have no influence. Only your company's preparedness is in your control. As your risk management practices improve, your supply chain will be better equipped to weather any supply chain storm.

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