A well-functioning supply chain enables businesses to receive raw materials, produce goods, and make them consumer-available. However, a variety of factors can disrupt this delicate ecosystem, leading to increased production costs, delivery delays, and customer dissatisfaction.
Increasing globalization and market volatility are creating greater supply chain vulnerability for businesses of all sizes. Supply chains have become more dispersed, creating interdependent relationships between companies and their suppliers, customers, and transportation providers. This translates to more vulnerable links, requiring businesses to be better prepared to deal with disruptions that can cause supply gaps and lost revenue.
The COVID-19 pandemic revealed that many companies lack the resilience and visibility needed to adapt quickly to rising supply chain challenges. As a result, empty shelves and missed delivery windows are now more than just industry buzzwords.
Supply chain disruptions can have a profound impact on the profitability and viability of a business. A wide range of factors can impact the availability of raw materials, components, or finished products, including natural disasters, geopolitical events, labor shortages, and regulatory changes.
For example, a natural disaster in one part of the world may affect shipping routes and can lead to delays in importing raw materials from another country. A geopolitical event such as a civil war or trade policy restrictions can close borders, restrict the flow of goods, or create pricing shocks that impact companies worldwide. A supplier facing financial difficulties can reduce its production capacity, raise prices, or change its product quality, which impacts other companies in the supply chain.
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