The COVID-19 pandemic has presented an array of obstacles and issues to supply chains across the globe. But these issues cannot be solely blamed on the pandemic, as supply chains were under pressure and buckling before 2020. Now, these supply chain issues have diversified and intensified to not only affect manufacturers, logistics firms, and retailers but also you, the customer.
What are supply chains?
A supply chain is a complex network made up of manufacturers, logistics firms, retailers, and delivery companies. Supply chains function to create a product and distribute it to the consumer. To function optimally, supply chains need a wide network of people, processes, and resources.
Are your online shopping deliveries being negatively affected?
In short, yes. Due to the pandemic, many people who were able to do their shopping online chose to do so for convenience and to maintain social distancing practices. This caused the demand for large amounts of goods to increase. Once the goods in demand depleted, many of the depleted goods were unable to be restocked and manufactured due to lockdown restrictions preventing factory work.
Once these goods were eventually manufactured, they had to be shipped to the distribution centres. Whether it was transported via truck, air freight, or boat, they could not be processed as fast as they were pre-pandemic due to lockdown restrictions. The staff in the distribution facilities has been limited due to social distancing practices, with some distribution centres closing for periods due to COVID-19 infections amongst the staff.
Once the products have been processed and been released to courier companies, the delivery people become faced with large amounts of products that need to be distributed as soon as possible. Due to staff limitations, the deliveries of these products were delayed due to the sheer number of deliveries.
What are the current supply chain issues?
- The COVID-19 pandemicThe pandemic placed major unexpected pressures on local and global supply chains. Due to hard lockdowns and restrictions, supply chains were forced to come to a halt. These pressures and effects caused major geographical shifts in supply and demand, which snowballed causing major issues for supply chains locally and globally.As mentioned earlier, supply chains had faced issues before the pandemic. Examples of these issues were increases in online shopping, delivery driver shortages, and skill shortages during production. These issues became amplified due to the pandemic.
- Doing business has become more challengingDue to the pandemic, and political factors, the economic and business environment has become more complex which has made business processes more challenging. A global example of this would be the effects of Brexit. The UK and Europe felt supply chain issues due to an increase in red tape and cross-border checks resulting from Brexit.Other, more common, examples of supply chain issues would be fluctuating exchange rates and the building of global management teams. This is all due to globalisation. Globalisation has offered many benefits and has made the movement of products easier but has also offered supply chain issues.
- The environmental impactSustainable supply chain practices have become a necessity as countries have pledged to meet specific emissions targets and commitments. To meet these targets and commitments means that many businesses need to change and revise their processes. This has proven to be a big supply chain issue as sustainable supply chain practices typically mean slower production.To resolve this issue, businesses have had to put time and effort into supply chain risk management. Supply chain risk management functions to find and determine where risks currently exist or may arise in a supply chain network. It also includes assessing the damage these risks might bring and putting specific mitigation strategies into place.