The Domino Effect: How Global Supply Chain Events Disrupt Your Everyday Deliveries
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Manufacturing is dependent on the supply chain. As they produce goods, manufacturers must be able to push those products out to retailers. From computer parts to food and beverages, the supply chain is an integral part of the movement of goods from raw materials through production and on to retailers and, eventually, consumers.
This makes the supply chain a key element to monitor — especially at a time that is anything but stable. Let’s take a look at a few recent disruptions to the supply chain and consider how those interruptions can trickle down to daily operations and deliveries in your facility.
A Look at Recent Supply Chain Disruption
In recent years we’ve had multiple supply chain issues, many of which were unforeseen or uncommonly chaotic. While nearly half a decade in the past, the pandemic is the easiest of these to highlight. From dramatic fluctuations in supply and demand to recurring curve balls, such as China’s zero-covid policy, the multi-year havoc of the coronavirus pandemic shook supply chains to their very core — and the ripple effects of those events continue to have an influence on economic activity in 2024.
The outbreak of war in Ukraine in 2022 was another unexpected factor that stressed already strained supply chains. Ukraine is a primary source of specific resources, such as grain and neon gas for semiconductor chips. Snowballing on the heels of pandemics and wars, several strikes have also played out in recent years. The United Auto Workers strike in 2023, for instance, ruffled feathers in the automotive supply chain. The potential for further strikes from North American maritime workers continues to loom large in 2024, as well.
Speaking of maritime activity, the waterways of the world have also been on edge in recent years. In the Middle-east, raids and skirmishes in the Red Sea have made the critical trade route of the Suez Canal more dangerous for cargo ships. In the U.S. the collision of a container ship with the Francis Scott Key Bridge in Baltimore, Maryland took eight weeks to remove and the bridge reconstruction could take years to complete.
Everywhere you turn, disruptions to the supply chain are occurring. Even if these events aren’t happening close to home, they can profoundly impact daily activity at the individual factory or warehouse level.
How Do Global Events Disrupt Everyday Deliveries?
It’s tempting to watch supply chain disruption from a distance and carry on without a second thought. For warehouse leaders, though, these are events that can have a very real impact on their organizations.
Upstream Supply Chain Disruptions for Manufacturers
One example of the negative effect supply chain disruption can have on daily manufacturing activity is if a major event were to prevent raw resources or product components from being delivered on time. Even if they are still in transit to your facility in some capacity, disruption can make delivery dates and consistency uncertain.
In addition, if supply chains are rattled, it can lead to higher prices as those in the transportation sector seek to minimize their own risks by passing costs down to their customers (who are often manufacturing companies in need of raw goods). Material costs can also increase due to interrupted or limited supplies leading to increased demand.
Maintaining quality standards can also become a concern during times of supply chain uncertainty. If, for instance, a manufacturer is able to find an alternative supplier, they cannot guarantee the quality of the resources they procure. This can compromise standards and hold up daily processes.
These examples all focus on the need of manufacturers to procure raw materials for the production process. However, this doesn’t encapsulate all of the ways supply chain disruption can negatively impact operations. Manufacturers are in the middle of the supply chain, not at the end of it.
Tracing Manufacturer Disruptions Downstream
On the other side of the flow of consumer goods, manufacturers rely on the transportation sector to distribute finished products to retailers, distribution centers, and at times, directly to consumers. Regardless of the final destination, if that distribution process is stopped or even slowed down, it can make production difficult to predict and can make it impossible to engage in important activities, such as demand forecasting.
At the end of the line, consumers can also influence supply chain activity. For example, the ongoing housing crisis and struggles with inflation in the United States can negatively influence the economy and reduce consumer spending. The impact can work its way down various supply chains as customers cut costs and avoid certain expenses.
From resource procurement to consumer sentiment, disruption can occur at any point along the entire supply chain. When that happens, it can create a domino effect that, at some point will influence the day-to-day operation of a factory or warehouse.
Disrupted Supply Chains Are the New Normal
Before the pandemic, supply chains were relatively resilient. This enabled manufacturers to cut costs and maintain lean supply lines. They could operate with greater flexibility knowing there was a reasonable degree of stability to the global system.
The ongoing disruption is showing that this is no longer a viable option. If companies want to keep the lights on, machines operating, and assembly lines running smoothly, they must ensure that they have robust supply chains that can withstand unexpected and prolonged disruptions.
In June, HSBC Americas head of global trade solutions Marissa Adams told supply chain leaders to stop waiting for things to go back to normal. “I don’t think that there is a normalization anymore,” Adams explained. “I think that what companies are now facing is that supply chain disruption is the new norm.”
Overcoming Supply Chain Uncertainty Through Internal Stability
As supply chain interruptions and delays become regular occurrences, it’s important for manufacturing leaders to look for other ways to build resiliency into their operations. They must invest in digital transformation and loyal, well-trained workforces that can withstand the unexpected.
Maintaining maximum production uptime and minimum internal disruption when the supply chain is healthy is also important. EAM-Mosca has helped many of our customers avoid downtime and expensive repairs through a variety of end-of-line packaging machines. These require minimal maintenance and can automate previously time-consuming activities. Our industry-leading strapping solutions are also cost-effective and eco-friendly, helping improve overhead and brand positioning, respectively.
If you’re concerned about your organization’s resilience when faced with supply chain fluctuations, reach out. Our team can help you improve the processing and packaging areas that you do have control over so that your business can withstand whatever external turbulence comes your way as you navigate the new supply chain normal.