The top supply chain disruptions in 2023 (and what we've learned)
Supply chain disruptions are, it seems, unavoidable. What can we learn from the ones we experienced in 2023? Discover more in our accessible article.
"When a storm blows, you must stand firm. For it is not trying to knock you down, it is really trying to teach you to be strong" – Joseph M Marshall
Storms. No one wants to get caught in one. But unfortunately, we seem to be living in a perfect storm when it comes to supply chain disruptions.
The issues that cause them are real – but we can work smarter to outwit them. One of the best ways to do this is to address them head-on and see what we can do to alleviate their effects. So heads up as we face the challenges of 2023 and see what we can learn.
Raw material scarcity
One result of the COVID-19 pandemic has been an abrupt rise in consumer demand. With many parts and materials now available only in limited amounts, some suppliers and retailers have struggled to meet demand.
In response, many businesses have shifted from a global supply chain model to one that's more regionally based. In addition, taking advantage of multiple suppliers can alleviate some of the issues that arise from raw material shortages and threaten your inventory.
Port congestion
This remains one of the top difficulties that businesses face in the post-COVID era. Port owners, shippers and carriers have struggled to come up with a viable solution. Ships are increasingly arriving at busy global docks where they are either unable to load or unload, as the ports have full capacity leading to congestion and bottlenecks.
Suppliers can't exactly walk into the harbour and start sticking parking tickets on ships. But they can, with some inventive problem-solving, mitigate the effects of these bottlenecks. One option is to look for alternative ports. Another is to stagger shipments across multiple vessels, thus spreading the risk and – hopefully – allowing at least
some
stock to pass through.
Geopolitical unrest leading to increased freight prices
The Red Sea has always been a critical route for cargo. In 2023, however, we saw geopolitical tensions that led to carriers having to choose longer routes. This meant longer lead times and higher costs.
The route through the Suez Canal is being used by many freight companies to avoid the Red Sea. This route, however, adds around 6,000 nautical miles to a typical journey from Asia to Europe. This could potentially add three or four weeks to product delivery times.
There's not much any of us, individually, can do about this. However, moves have been made by the international community to defuse this disruption in global trade and restore security to this route. Watch this space in 2024 to see what happens.
Forecast demand
An expensive issue for businesses is poor forecast demand analysis. The problem with forecasting demand for your product is that market conditions are in constant flux. Changes in geo-demographics, moves by competitors, seasonality and vendor pricing are just a few of the issues that can make this job one of the hardest your business could face.
We don't want to catastrophes. These factors can have a real effect on your business – but there are ways to work around them. When it comes to demand forecasting, it can help to track sales velocity and lead times with a warehouse management system.
Labour shortages
Labour shortages have significantly impacted supply chains in 2023.
The result has been delays in distribution, production, and logistics. Skilled workers, warehouse staff, truck drivers and other roles essential to delivery have continued to see a shortage. This has led to increased costs, slowed fulfilment times and bottlenecks.
Perhaps the simplest but most effective thing you can do to address this problem is to make your staff feel valued through clear communication, regular check-ins and even a rewards programme. Research suggests that all these measures can help to boost employee retention.
Semiconductor shortage
The semiconductor shortage in 2023 hit some industries hard, especially the motor industry. Car production was slowed down or halted altogether due to a lack of chips. Consumers saw fewer new cars available to buy.
The shortage also affected electronics like smartphones and laptops. These products were pricier and harder to find for the consumer. Many manufacturers across different sectors faced delays and increased costs due to this shortage, impacting their ability to meet customer demand.
This shortage is out of your hands. But you can focus on updating your software rather than hardware as a temporary measure. If your product needs a component that's in short supply, see it as an opportunity to redesign it – or design something entirely new.
How we can help
Supply chain disruptions are like the weather. You can't change it but you can take steps to fortify yourself against it. Working with a 3PL is one positive measure you can take to ensure you don't get drenched.
Here at Stowsafe Fulfilment, we can build a bespoke logistics plan unique to your individual business. In addition, we have the ability, if needed, to customise your packaging and labelling and combine multiple products into individual kits.
Let us take the stress away so you have extra time to focus on your business. Perhaps you're facing a labour shortage or need to change from a global supplier to a more regional one. Now's your chance to rectify these issues. We can take on some of these tasks and stresses so you, in turn, can spend more time on making your business grow and flourish.
Enjoy dedicated, scalable warehousing space at our 24,500-square-foot, highly secure facility. Take away the worry of demand-supply predictions by having a dedicated space where you can store your products. If you need to scale up quickly, that’s no problem for you or us. It's all just a phone call away.
We're also situated in a prime location close to major road links and we offer same-day dispatch for orders received before 2:30 p.m. This allows your goods to be delivered efficiently and speedily.
Who knows what 2024 will bring in the world of logistics and eCommerce? You can rest assured that even if there are storms ahead, you're in good hands with Stowsafe.
Are you looking for a
fulfilment centre to help you weather the storms of 2024?
Get in touch for a quick, competitive quote today.
