Protect Your Supply Chain From These 6 Major Threats
The supply chain in every company will face a growing number of threats as it grows and becomes more intricate. The ability of a company to thrive depends on finding solutions to these threats in order to reduce the exposure to the financial losses they can bring. The biggest problems that can arise from disruptions in the supply chain are a slowing or stopping of output and thus customers become dissatisfied with the service. Large-scale disruptions in the supply chain can reduce share prices by 7% on average. Hard work and vigilance is needed if your organization is to retain a resilient supply chain, these are the 6 most common supply chain problems.
The price per unit customers pay is subject to the varying costs of the materials and components required for production. The reliance on oil, the variable cost of raw materials and other seasonal variables has the capacity to have a detrimental impact on your supply chain.
Labor costs fluctuate more than any other cost within a warehouse. Amendments to workers’ contracts or new minimum wage legislation can increase the cost of products dramatically. Other risks, such as industrial action by workers, can stop the supply chain completely.
It may take some investment by your company to insulate them from these threats, but it’s certainly worth it considering the damage that can be done to their reputation if they are hacked. Occurrences such as these linger long in the minds of consumers, bring devastating financial losses and cost people their jobs. Every aspect of the supply chain needs to be secured from these threats.
Legislation and Compliance
Environmental and safety legislation is becoming more stringent and aggressively enforced in recent times. Agencies such as the EPA and FDA can administer heavy fines for non-compliance with their laws. Besides this, companies who export are exposed to the legislation of other countries as well.
Occurrences such as political upheaval and the riots and wars which can result can have grave consequences for the supply chain. Shipping routes may need to change and parts may need to be sourced from elsewhere.
Floods, earthquakes and hurricanes are just a few examples of what you could face, and these can strike without warning. They have the capacity to wipe out the entire supply chain and stop production completely.