Supply chains are extremely tenuous yet important lifelines which provide your business with the essentials it needs to survive. As the global economy grows and companies spill into other countries, supply chains lengthen—and your risks grow. The farther away your business is from its suppliers, the greater the chance for a disruption to your supply chain.
Even small companies with limited reaches face possible supply chain disruptions. In fact, smaller companies may suffer disproportionately from supply chain disruptions, since unlike larger companies, they may not have the resources to withstand even a small disruption. A single disruption could spell disaster for your business. How long can your business survive without the essentials it needs?
The following are some of the main causes of supply chain disruptions:
• Disruptions at the source, such as a reduced or complete halt in supplier production due to natural, man-made or economic causes.
• Disruptions in transit, such as late or non-delivery due to infrastructure failure, inclement weather or man-made disturbances.
• Disruptions at your business, such as poor delivery quality, a defective product or reputation issues involving your product sourcing.
• Disruptions at the corporate level, such as cost issues, IT system failures or a social media blunder.
Supply chain disruptions have lasting impacts, including those listed below:
• Increased costs
• Reduced sales
• Decreased market share
• Damaged brand and reputation
• Various fines (e.g. health and safety or product recall)
Make sure you address your supply chain risks and establish contingency plans in case disaster strikes.
