SUPPLY CHAIN ISSUES HOW TO

As we emerge from the COVID-19 slowdown, many businesses recognise the need to better equip their supply chains by identifying alternative trading partnerships. Together, these are shaping more resilient and cost-effective supply chains that can position their respective organisations as leaders in this new normal.ģ. Overreliance on a limited number of third partiesĭespite the inherent risk associated with focusing on `one major trading partner', many businesses have strong relationships with just one major supplier, one large customer (or export market) and/or one major supply chain partner. Through increased awareness and a need to maintain competitiveness, the industry is compelled to address many long-standing supply issues and re-engineer product specifications. The days of buffering inconsistent supply with excessive inventory at the lowest purchase cost are also quickly becoming a relic of the past as manufacturers evaluate risk as a key decision point in their supply chain development. The pandemic has intensified the focus on supply chain evaluation and evolution with the industry evaluating and investing in long-term supply chain strategies to pave the way for a new post-pandemic normal. Manufacturers are competing for limited supply of key commodities and logistical capacity, leading to empty shelves and long purchase lead times for consumers. Production delays during COVID-19 have become headline news.

SUPPLY CHAIN ISSUES HOW TO

Companies should look to redesign alternative supply chain flows, build inventory storage capabilities closer to their customers, and determine how to best enhance last-mile deliveries and returned goods. Government and industry leaders are seeking to define strategies that build resilience and boost our domestic capabilities, to become less reliant on regional and global supply chains. Consumers should reset their expectations, as items requiring repairs and maintenance could also be delayed in lengthy service queues.

In the interim, consumers should expect to see higher prices (as excessive freight costs are passed down), and longer waits for retail shelves to be replenished (especially imported products).

However, the challenge for many businesses within some of these markets is that it may go well beyond the next three to four months, as these disruptions look set to continue into 2022 and beyond.Īssuming that these disruptions recede, and access to sea and airfreight reverts to pre-pandemic levels, it will likely take some time before things return to normal.

Many reports highlight a high likelihood that the December 2021 and January 2022 festive seasons across the region will likely be severely impacted by restricted access to imported products. The major logistics disruptions create a ripple effect across global supply chains that ultimately cause goods to pile up in storage, impacting ships on their way to ports - in the form of diversions or delays as they arrive at major transit hubs, restricting global trade flows and limiting access for businesses to import products and refill their inventory stocks. The ongoing global logistics disruptions stemming from the COVID-19 pandemic continue to impact businesses and consumers as the flow of consumer goods into key markets, such as North America and Europe, Southeast Asia and India, is restricted by the continued shutdowns of major global ports and airports, largely in China, South Korea, and the US. CEOs are looking to get on the front foot when it comes to disruption and innovation, with 67% saying they will increase investment in disruption detection and innovation processes.Īs the effects of COVID-19 continue to impact the global supply chain, how should businesses seek to build resilience into their supply chains moving forward? Below are some of the major disruptions affecting supply chains, and strategies that leading organisations are rapidly deploying to help build resilience and agility. It is testing the commercial, operational, financial and organisational resilience of the majority of companies across the globe, and has highlighted risks and resiliency gaps for many organisations. The recent pandemic has affected every part of the value chain, from raw material sourcing to end customer.

Supply chain issues