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Disruptions in the Supply Chain: Threats, Challenges and Solutions

Updated on Jun 1, 2022
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Supply Chain refers to the series of processes responsible for producing and distributing a commodity. Ever since the pandemic, several organizations have suffered unprecedented disruptions in the supply chain. Chief amongst these have been the technology and chip component industries.

supple chain

The past two years witnessed a sudden decrease in demand, followed by an unexpectedly expedient recovery. This put the technology and electronic industries under unprecedented strains to cater to the vastly fluctuating consumer needs.

The sudden shift to remote working on a global scale meant that an unprecedented number of consumers now began to rely on more electronic devices and tech-based solutions. This surge in demand amongst the tech manufacturing industries further strained the production and supply processes making product shortages inevitable for the masses.

If suppliers are to eliminate the possibility of similar disruptions in the future, they must be aware of both the explicit and less apparent flaws in the current systems. They must revamp their approach to the supply chain and look for digital and tech-based solutions to ensure delivery with speed and precision. This can also help them minimize capital expenditures and uproot the weaker links.

Challenges in Supply Chainchallenges in supply chain

Constraints in International Ship

The supply chain process, starting from inbound materials to assembly and testing, can involve several international shipments, all for the manufacturing and distribution of a single product. As far as the US is concerned, tech-based companies largely depend on international shipments. International flights were drastically cut back during the pandemic, greatly backpedaling the supply chain.

Shortages in the Supply of Semiconductor Chips

The chip industry perhaps drew the most significant attention in the past couple of years for not the best reasons. It was one of those industries that saw the most supply chain disruptions due to the pandemic. While it will be challenging to meet the new capacity online, chip manufacturers are currently trying to bridge the increasing gap between supply and demand.

Increased Domestic Investment in Manufacturing

The US has increasingly relied on foreign manufacturers to meet its growing demand for electronic components. This also includes critical components that are vital to national security. The constraints in international shipment meant an increased reliance on US manufacturers, which has opened up pathways to quickly help these supply chain manufacturers adapt to the new circumstances.

Changing Consumer Behaviors

Even before the pandemic, tech-based companies witnessed an increased demand for digital services and eCommerce. The trend further accelerated during the global emergency. Supply chain organizations have had to supplement and quicken their eCommerce and B2C operations like never before. Not only must the supply chain organizations solidify their operations through control tower and LLP solutions, but they must also keep tabs on the impact that these disruptions make on return operations.

Uncertainty in Trade Relations

Recent unpredictability in trade relations has directly impacted the tech-based supply chain. Manufacturers are under constant pressure to operate within continuously changing international trade relations and shifting policies.

Potential Threats to Supply Chain

The supply chain disruption has emerged as an offshoot of global resource disruption. The latter affected not only production and distribution but also investment and labor.

Unfortunately, top analysts predict that the disruption will continue to prevail throughout the first half of the current year. Several impediments are prevailing, chief of which are the persistently incoming waves of the Covid-19 variants, which have halted long-term planning.

In the absence of a compact labor policy and confirmed regulatory responses to Covid threats, it can prove quite tricky to restore the supply chain operations like before.

How to Resolve Supply Chain Issues

To tackle the disruptions in the supply chain, organizations must carry out the following operations without delay.

  • Organizations should keep up with data collection efforts to assist business processes.

  • Tech-based companies must reassess the components of their core operating systems. For example, they must look at the management systems, organizational frameworks, and processes to ensure that these are up to the standards.

  • Companies working with logistics must integrate big data and their core business processes. They must segregate data critical to understanding their business needs from redundant data.

  • Organizations must incorporate AI and ML in their processes and make data sharing easier across all tiers.

Conclusion

According to modern analysts, digital solutions based on AI, IoT, ML, blockchain, and RPA can ensure greater traceability, transparency, and efficiency across the supply chain processes. In any case, companies will have to look at all available solutions to make the supply chain more resilient to disruptions in the future.

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