When you can go to your favourite store and get exactly what you need (and frequently a variety of brands and alternatives) neatly piled on shelves, or when you can purchase items and receive them on time, the supply chain is not disrupted and this seamless process is what many people had grown accustomed to.
However, when the supply chain is disturbed by local events such as natural catastrophes or global events such as pandemics, this continuous process appears far-fetched and a complete sham.
Shipping and manufacturing delays was something that wasn’t a heard of but with the occurrence of Covid 19 left the global supply chains crippling and many businesses crumbling down. China, where the pandemic initially started factories have been affected for months, plays a much bigger part in the global economy.
Businesses have experienced a reduction in global demand because of fear and online distancing and a study conducted by the Institute Of Supply Chain Management recorded that at least 75% of all surveyed businesses experienced a disruption in their supply chain due to the pandemic.
Other unanticipated events have created supply chain upheaval in these current times including the USA-China tensions, Russia and Ukraine Wars.
There has never been a bigger test put on the world’s industry and supply systems than now. It demonstrates the pressing need for greater agility, accessibility, and digitization in supply chain and industrial processes.
In this post, we’ll look at what is supply chain disruption and some of the most prevalent causes of interruptions, how to we are helping business overcome this crisis.
What is Supply chain Disruption?
To answer what is a supply chain disruption, we have to first understand the meaning of supply chain. Supply chain can be described as the free movement of goods from the supplier to the end user, who is you and me(consumer).
Supply chain disruption can be defined as any event that disrupts the free movement of products or manufacturing, sale, or distribution of goods. As we said earlier, A well-organized supply chain is critical for preserving product quality from beginning to end and ensuring that all resources used are of the highest quality.
So, if this free movement of products is blocked then it’s a supply chain disruption. In layman’s terms, it’s like a river where stuff is heading downstream, but something blocks the flow of materials.
What Can Cause Supply Chain Disruptions?
Internal or external factors might be the source of supply chain disruption in several businesses. The following are the typical factors that may create these interruptions:
In the previous year, we’ve seen how the Covid-19 (novel coronavirus) epidemic wreaked havoc on global supply chains across sectors. The magnitude and effect of global pandemics and public health emergencies may be devastating to supply networks. It has an impact on SCs, the individuals engaged, regions, and multinational organizations at every level of the manufacturing process.
2. Natural Disasters
In 2011, an earthquake off Japan’s Pacific coast triggered a tsunami, resulting in a nuclear accident at the Fukushima Daiichi Nuclear Power Plant. This nuclear disaster had an impact on all small enterprises and the worldwide economy since it halted manufacture of the world’s supply of 300-millimeter silicon wafers (an key component used in semiconductors) and other following critical parts. Tsunamis, hurricanes, wildfires, and floods expose supply chain flaws in the broader SC structure.
3. Logistics Delays and Failures
Globalization and increased commerce have made overseas providers more frequent in supply chains. As a result, there are more economic prospects, but there is also more demand on international and local transportation networks, resulting in congestion and delays.
Supply networks can intensify logistical issues by introducing unknown factors. A catastrophic event can disrupt the delivery of goods and services in an affected region, or a country can enter lockdown, thereby making it impossible for carriers to transport commodities by land, air, or sea, even in the case of a pandemic.
4. Price Fluctuations
Price changes for suppliers in your supply chain can also trigger changes since you must decide whether to switch suppliers, raise your own rates, or see your profits lowered by covering the expenses yourself.
Price changes can be prompted by a wide range of factors. Commodity prices, for example, like crude oil are generally unpredictable and can have a significant effect on the financial overhead of a variety of transportation and manufacturing elements.
Cyber attacks may happen to any firm at any moment if they are not appropriately safeguarded. Your supply chain can sometimes unintentionally expose you to attacks. If any link in your chain has insufficient security standards, hackers may be able to get access to your data.
This is what happened in 2014 when Target faced a big security breach that began with a hack in their HVAC partner via a phishing operation. The possibility of cybersecurity threats disrupting your supply chain or leading to your own attack makes it critical to have excellent communication and connections with all links in your chain and to be aware of any vulnerabilities.
6. Product Problems
Quality assurance and management are critical components of supply chain management. A problem with the product can develop at any point in the supply chain, causing the company to miss the deadline for releasing the final product. Businesses do not want to offer poor quality goods or delay shipments because of faulty products. Providing a strong quality assurance across the supply chain is imperative.
How does Supply Chain Disruptions Impact Manufacturing?
Supply chain disruptions can cause:
- Product shipment delays
- Quality issues
- Increased customer complaints
- Lost revenue
- Inability to gain first-mover advantages
How does Zignify Global Product Sourcing Help Minimize Supply Chain Disruptions?
We allow product teams and supply chain stakeholders to cooperate in real-time from any place by providing access to current product information. This keeps all affected teams on the same page and helps to avoid production design problems, material shortages, and other supply chain disruptions.