For many companies, supply chain disruption has become an unavoidable reality. As the continuous difficulties affect production, almost every industry has experienced at least some chain reactions.

1. Availability of raw materials

One of the most important aspects of production affected by supply chain disruption is the supply of raw materials. 

The early covid blockade restricted the procurement and production of materials such as metals and plastics. 

The shutdown of the plant severely restricted the supply, and the output of polyurethane and polypropylene in the United States decreased by 10%-15% in 2020.

2. Material cost

A related consequence of supply chain disruptions is rising material costs. About 86.6% of global manufacturers listed the rising cost of materials as the main business challenge in early 2021, and this problem has always existed. A slow recovery in supply and a surge in demand from other producers have pushed prices higher.

3. Freight

Materials themselves are not the only factor of production for which prices have soared. Supply chain disruptions have also pushed up global freight rates. These higher costs may further limit the Economic Liquidity of manufacturers and lead to higher end-user costs. This may affect requirements and lead to further disruption.

4. Labor force

Some production areas do not seem to be directly related to supply chain disruption, but they have undergone significant changes. Facts have proved that the labor shortage is particularly challenging, and the increase in the number of departures in the manufacturing industry is the largest among all industries. This is caused by many factors, but supply chain disruption is part of it.

5. Forecast

Supply chain disruptions also confuse production and demand forecasting. The shortage of raw materials and the complexity of international shipping continue to exist, affecting consumer demand. How this demand will respond to these challenges may be difficult to predict, leading to difficulties in forecasting.

When and how are supply chain disruptions resolved?

Manufacturers, logistics professionals and other supply chain parties should make adjustments to prevent similar problems in the future. One of the most important steps is to maximize visibility.

If all supply chain partners collect and share more real-time data, it will be easier to identify and respond to potential disruptions.

Visibility and communication are critical, but they are only part of the solution. Supply chains must also become more flexible to respond to these insights more quickly. This may mean abandoning lean principles in favor of distributed procurement, backflow, and building production buffers.

It is also important to realize that even if these steps are taken, the current interruption will last for some time