Are Supply Chain Disruptions Getting Bigger?

Published : August 14, 2015

supply-chain-disruptions

When you’re planning how to keep your fulfillment center humming along at peak efficiency, primary concerns tend to rest with making sure your intra-company workflows are where they need to be. The looming specter of disruptions often, and unfortunately, tend to be relegated to crossing-that-bridge territory—a reactionary stance, a plan B. But you can’t ignore that fact that we’ve seen an increasing number of obstacles popping up more frequently in the news and in our supply chains in the last few years. Everything from foul weather to tech failure has been snarling up the works for high-and low-profile companies alike this year. 

The important takeaway is determining whether this is a true uptick in problems that must be handled or just a matter of publicity and perception, and what a conscientious manager can do to limit liability in disruptive scenarios.

The Turning Tides of Product Movement

Some disasters, such as hurricanes or strikes, simply can't be prepared for months ahead of time. This doesn't mean that a company is helpless to the ravages of Mother Nature or union disagreements, but it does mean they'll be dealing with limited options when the time comes. Understanding your risk factors—such as the vulnerability of shipping lines in hurricane-prone areas—is important. 

Consider the following questions when assessing your own weather risk:

  • Do we have other options if our "main" shipping line is compromised?
  • Do we have any financial protections—insurance, etc.—to help if stock is damaged by weather?
  • Do we have transparent data on where our stock is, or are we at the mercy of carrier updates?
  • Is our "main" shipping company reliably agile in responding to potential weather threats?

If any of your answers are ambiguous, the time to clarify them is now, not when you're facing a crisis and your shipments are already behind.

Is Tech Your Achilles' Heel?

Some IT disruptions, such as cyberattacks, are also out of your company's hands once they happen—which means that prevention is extremely important. The growth of digital connections and concepts like the "Internet of Things" help increase productivity and supply chain transparency, but they also leave a lot of tempting gaps for hackers to slip into. Your fulfillment center needs these connections to be competitive, so work with your IT department to schedule periodic, though staggered, assessments of system security. 

Many of this year's headline-making cyber breaches carry the same refrain—that the intruder(s) were in the system for months or even years before routine checks flushed out the problem. Beyond malicious outside influences, a surprising source of IT disruption is unavoidable downtime during transitions and upgrades, according to an APQC infographic in Supply Chain Management Review. Have a firm plan and timeline in place when upgrading or replacing hardware and software within your fulfillment department.

Scarcity Can Hurt Supply Chains Too

Sometimes disruption isn't merely a failure to get product from point A to point B efficiently, it's the lack of resources necessary to produce that product in the first place. According to Guy Courtin of ZDNet, ongoing shortages, like the drought in California, can affect companies at several levels. Even if your company doesn't directly use California-area water to produce a finished product, you need to ensure that shortage doesn't affect the components that lead up to it as well. 

If that water factors into how your packaging is manufactured and printed, for example, you'll still find your product movement hampered in the long run. Work with your manufacturing team and R&D to ensure that each component of your product and packaging are as low-risk as possible and to determine a backup plan if a given component were suddenly scarce.

Supply chain disruptions don't need to spell disaster for your fulfillment center—while some are unavoidable, their ultimate impact is determined by your planning and reaction time. While disruptions may initially feel like they're getting coverage almost everywhere, don't let individual articles cause concern. Look for ongoing trends when determining which weak points in your supply chain need more support.

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