- Logistics disruption
Although 2019, 2020 and 2021 were the worst in terms of the effects of the pandemic, 2022 continued to be challenging in terms of supply chain disruption. The pandemic continued to impact businesses and consumers since the restrictions put by governments worldwide had not been completely lifted. The lockdowns and restriction of movement in South East Asia shut down major ports and Airports, mainly in China, a key supply chain hub. In last year’s festive season, from December to January of 2022, many people were affected by the pandemic, which is still being felt in some parts even as we head to a new year.
- Multi-tier supply chain visibility
As the pandemic persists, the number of risks continues to mount, and the process continues to become harder. These challenges have exposed the lack of multi-tier visibility to monitor and manage risks. Despite the availability of multi-tier mapping tools, supply chain visibility continued to be a key challenge. Despite the presence of these tools, many organizations have not embraced them, and their customers face various challenges. Furthermore, since the first-tier suppliers are not always transparent, having a multi-tier visibility plan resolves the problem.
- Scarcity of materials
Since the pandemic began, there have been insufficient inputs. As retailers and suppliers struggle to meet the demand amidst the unavailability of parts, supply chain companies continue to encounter problems in fulfillment due to clogged supply routes. In different industries, there have been shortages, such as a lack of foam to manufacture furniture. While these shortages are due to the pandemic, other issues, such as global disruptions of peace, have exacerbated the problem.
One thing that many supply chain companies have learned from the pandemic is the importance of having the manufacturing hubs closer to the customer. Nearshoring reduces the risks of a breakdown in supplier networks and allows fulfillment to be achieved on time. In 2022, supply chains were strung worldwide, meaning optimal configuration is necessary for customer satisfaction. As the challenge continues, supply chain managers must think financially and the importance of de-risking their supply chains. Once a map is in place, an optimization plan needs to be developed.
- Dependency on China
The problem of depending on China became evident during the pandemic as supply chains nearly came to a standstill due to restrictions. It is now evident that a conflict between China and Taiwan will be catastrophic, and this has already been seen with the shortage of chips and the disruption of the supply chain in the recent tensions in the region. A disaster such as an earthquake in Taiwan and China will affect the supply of goods and make crucial components. The US should bring manufacturing closer to Mexico and Canada, where it is easy to transport goods to the customers even when there is a problem in the global supply chain. A lot of work is needed to create an integrated transportation network between these destinations. Still, the good thing is that the distance will have been cut significantly, and the uncertainty affecting the global supply chain will be dealt with.