A supply chain disruption is any event or situation that interferes with the normal flow of goods and services. It can be caused by a variety of factors, including natural disasters, labor strikes, geopolitical events, disease outbreaks and transportation restrictions. Regardless of the cause, these interruptions can lead to production delays, shortages of raw materials and finished products, increased costs and reduced customer satisfaction.
Supply chains are complex and interdependent, with manufacturers sourcing materials, assembling products and shipping them to consumers across the globe. As a result, disruptions are rarely localized: when something goes wrong in one industry, it almost always affects adjacent sectors and economies.
The COVID-19 pandemic, for example, wreaked havoc on global supply chains, with the loss of shipping routes leading to long lines at ports and rising freight rates that drove up the cost of commodities such as oil, copper and coffee. In turn, companies were forced to pass these increased prices on to consumers, resulting in lost sales revenue and customer dissatisfaction.
The good news is that companies can prepare for disruptions by improving their visibility and reducing their risk through smarter sourcing, technology tools and better connections with suppliers. Read on to learn how to build resilience in a fast-changing world.