The 6 Supply Chain Disruptions That Could Wreak Havoc on Your Business

Supply chain disruptions are a global-scale event that interrupts the flow of goods or services. Disruptions can be triggered by natural disasters, accidents, human error, and hostile acts. Natural disasters, accidents, and human error are often caused by a disruption’s cascading nature.
Strict supply chain management practices have helped minimize the impact of most disruptions on global trade. A disruption’s cascading nature is characterized by how many organizations are affected, how fast it spreads to other countries or regions, and the level of damage it causes to the disruption’s point of origin.

  1. Scarcity of Services or Raw Materials :

The idea of scarcity is a key factor in economics. It is the idea that there are not enough goods and services to go around. This can be due to many reasons, such as natural disasters, war, and high demand for goods.

2. Cyberattacks on the Supply Chain :

Cyberattacks on the supply chain can be devastating for companies. They can cost billions of dollars in lost revenue, damage their reputation and lead to a loss of trust from customers.
The most common type of attack is spear phishing. It is when a hacker sends an email to a company that looks like it came from someone within the company and contains malicious links or attachments.

3. Significant Increase in the Cost of Labor :

The labor shortage is a problem that has been growing steadily. In the past, it was a problem that only affected the agricultural industry, but now it is affecting many other industries as well.
AI can be used to automate some of the tasks that are being performed by human employees. This will allow companies to save money and hire fewer employees in order to complete their work.

4. Natural Disasters & Major Infrastructure Failures :

Natural disasters and major infrastructure failures have a significant impact on the supply chain, leading to disruptions in the distribution of products. This can lead to an increase in prices, which increases inflation and eventually leads to an economic decline. Governments should take measures before disasters strike, so that these disruptions can be minimized or prevented.

5. Production Difficulties Due to Facility Damage from Natural Disasters & Major Infrastructure Failures :

Natural disasters and major infrastructure failures such as the 2011 Tohoku earthquake, the 2016 Kaikoura earthquake, and the 2017 Grenfell Tower fire have all caused facility damage that led to supply chain disruptions.
The 2011 Tohoku earthquake led to the collapse of the Fukushima Daiichi nuclear power plant and a severe energy shortage in Japan. As a result, there was an increase in demand for petroleum and chemical manufacturing, causing significant supply chain disruptions in these industries.

6. Increase in Unrest Throughout the World Affecting Distribution and Transportation Routes for Goods & Services Provided by Foreign Companies :

The recent increase in unrest throughout the world has caused foreign companies to reassess their distribution and transportation routes for goods, services, and commodities. The advent of terrorism has led to a decrease in global trade and an increase in the risk factor for these companies.

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