Global political unrest is the main factor causing current supply chain issues

According to a 2019 report published by the Journal of International Logistics and Trade, political unrest are among the leading causes of supply chain disruptions.

A SAP survey reported that 58% of US business leaders believe supply chain problems primarily stem due to global political unrest.

The main culprit behind the current supply chain issues worldwide

Global political unrest is indeed the main factor responsible for the current supply chain issues. Business leaders rated global political unrest as the number one reason (58%), with the shortage of raw materials (44%) and increasing fuel plus energy costs (40%) following a close second. Only 31% said inflation is a contributing factor.

Unfortunately, commodities and supply chains all across the world have now become more politicised than ever, triggered by a variety of events, including the strained US-China relationship over imports, the China-Taiwan tensions, Brexit, and the Russian war in Ukraine.

The survey results above demonstrate the impact of this politicisation on the global supply chain, with further disruptions to supply chains expected throughout 2023. In fact, at least 50% of business leaders are now anticipating a shortage of raw materials in the US alone, and 44% estimate that public transport will also be disrupted due to a lack of skilled labour.

Business leaders have been forced to strengthen their existing supply chains through specific measures which include:

  • Adopting new technologies and digital tools to overcome the current challenges and any future or unforeseen ones
  • Finding more environmentally-friendly and paperless supply chain solutions
  • Shifting toward ‘just in case’ supply chains from ‘just in time’ ones
  • Implementing fresh contingency measures

The global political unrest simply could not leave supply chains alone, especially with the war on Ukraine which impacted gas and oil supplies, as well as food security, with a knock-on effect seen on energy. Escalating China-Taiwan tensions as well as an increasing pressure on US companies to diversify their supply chains (including semiconductor and critical minerals) away from China, have led to geopolitical fragmentation.

Why firms are moving away and should move away from ‘just in time’ supply

The SAP survey also revealed how almost 2 in 3 companies (64%) are moving to the ‘just in case’ model by increasing their inventory in storage. This means that they can meet customer demand more effectively, although it does come at an increased overheads and operational cost.

However, managing the supply chain is a perpetual balancing act. In the last decades, we have seen the ‘just in time’ approach trade resilience in exchange for lower costs and efficiency, which made the supply chain rather fragile.

In the current economic climate, cost is an even more critical factor. This is why technology can help manufacturing and supply chain firms to strike the perfect balance by enabling real-time collaboration between teams and trading partners.

HS Manager app instantly generates PDF reports and customisable inspection checklists to help you get a bird’s eye view of your supply chain processes. It’s an excellent tool for keeping costs down and efficiencies high.

For more information visit https://www.thehsmanager.co.uk/

Related News

Supply Chain Sustainability in Warehousing and Manufacturing

Supply Chain Sustainability in Warehousing and Manufacturing

Supply chain sustainability refers to effectively managing the social, economic, and environmental factors within an organisation’s supply chain. A very important aspect of this sustainability initiative is recognising and acknowledging the link between a manufacturing company and the broader ecosystem they may be impacting – and then coming up with responsible business practices to make all aspects of the supply chain sustainable.

Logistics Trends for 2024

Logistics Trends for 2024

As we eagerly look to a bright and productive year ahead, the UK’s logistics sector is at a bit of crossroads, so to speak, poised for disruption amid a backdrop of regulatory shifts, technological evolution, and global economic dynamics.

Automation in the Manufacturing sector

Automation in the Manufacturing sector

In a recent report released by The Manufacturers’ Organisation, half of the companies surveyed are upping their investment in automation technologies, especially AI and ML, with almost ¾ of companies now spending more openly on automation across multiple technologies and functions – from product design and development to manufacturing and warehousing operations.

health and safety checklist app

How to continuously improve your H&S practices in manufacturing and logistics

Organisations working in high-risk industries like manufacturing, warehousing, supply chain, and logistics, are well aware of the risks and potential hazards their workers face each day. Unfortunately, despite their best efforts, many businesses do not have the appropriate health and safety controls to minimise risk and hazards at the workplace.

safety inspection app

Why there needs to be an increased focus on H&S in manufacturing

According to an HSE report, around 54,000 workers are involved in non-fatal accidents in the manufacturing sector each year. Most of the injuries they suffer are a direct result of manual handling accidents, trips, slips, and falls, contact with moving machinery, and being struck by moving objects.

health and safety audit software

How technology & automation is changing logistics and supply chain management

It is estimated that the logistics industry will grow at a CAGR of 10-12%, reaching a value of $380 million by 2025. A large driver of this growth will be technology and automation – from robotics and the Internet of Things (IoT) to artificial intelligence (AI), better integration of the various ecosystems involved, digitisation of processes, and more.

Standardisation in data collection

Standardisation in data collection – How far has it come?

Supply chain inspections often prove to be a challenge, even for leading, well-established companies. However, standardisation has now become one of the chief methods of optimising the greater supply chain and ensuring that all managers, departments, and teams are on the same page.

Navigating the Future of Warehousing

If you think about, warehouses and everyone working within those walls, are the unsung heroes of supply chain and distribution. Without quality warehouses equipped with the latest technology, we would not be enjoying the super-fast at-home deliveries or products being available on shelves almost on a 24/7 basis.

Top