Supply chain disruption is any event that interrupts the normal flow of goods, exposing companies to risk and impacting customers. It can result in materials scarcity, delayed deliveries and a range of other issues that affect the bottom line. These events can be caused by a wide range of factors including natural disasters, global political tensions, transportation infrastructure problems, changing laws and regulations, workforce issues and more.
Regardless of the cause, the effects are always the same: production lines pause, inventory levels drop and demand drops. This results in missed delivery windows, lost sales and customer dissatisfaction. Fortunately, strong planning, greater visibility and the use of best practices in risk assessment and management can mitigate these effects.
One issue often overlooked is that supply chains are interconnected across multiple companies and regions. This creates complicated and sensitive relationships with suppliers, and even local events can have ripple impacts. For example, the COVID-19 pandemic demonstrated how a single disease outbreak can affect everything from manufacturing to transportation.
While some of these risks can be predicted and planned for, others are not. This is why it’s important to keep a finger on the pulse of your supplier relationships, consider on- or near-shoring options and invest in talent development. It’s also a good idea to diversify your supplier base and use technology tools to improve visibility. This will help you react faster and more effectively to sudden changes. Ultimately, it’s about building resilience for the long run so that you can survive whatever comes your way.