2020 was a pivotal year for global supply chains as Covid-19 wreaked havoc on virtually all aspects of society but, while the shadows of the pandemic linger, other problems have surfaced which continue to present challenges for supply chain managers. In this article, we discuss some of the main supply chain problems and explain how, at LPC International, we can help you to overcome these.
1) Material Shortages
Even before the pandemic, concerns existed regarding the availability of some raw materials. A continued shortage is affecting many manufacturers, a situation made worse by the war in Europe which has severed supply routes for commodities from Ukraine and the Russian Federation. A survey by the Institute for Supply Management (ISM) described ‘record long lead times, wide-scale shortages of critical basic materials, [and] rising commodity prices’.
2) Labour Shortages
Many companies are experiencing recruitment issues and can’t find labour and/or people with the right skill sets. The shortage of labour has been caused by the movement of workers and decline in the size of the working population and the unattractiveness of many jobs. This is leading to the push to introduce more automation and robotics into the workplace.
3) Shipping – Freight Costs And Port Congestion
Lack of capacity in the right place has caused surges in freight costs, a situation not helped by congestion at ports. Ships that are unable to load or unload their cargo – a persistent problem that port owners are trying to solve – are a major contributing factor to ongoing supply chain problems worldwide. A delay in one country can have significant repercussions in others, even if their own ports are operating fluidly, so businesses are often unable to offer clearly defined lead times for products sourced from overseas.
4) Inaccurate Demand Forecasting
Demand forecasting is key to effective supply chains as it enable businesses to predict consumer purchasing habits. Accurate forecasting relies, in part, on sales data from previous years; however, due to unpredictable fluctuations in demand during the pandemic, much recent data unreliable. Supply chain managers are having to consider other methods of demand forecasting and to continually refine their predictions to achieve an accurate outlook.
How Working With LPC Can Deliver Effective Supply Chain Solutions
LPC International offer expert consultancy services that improve supply chain management so that it is flexible and adaptive to changing circumstances.
Our consultancy service considers all the key components in the supply chain holistically, including:
- Location and cost of manufacturing
- Manufacture lead time
- Delivery lead time
- Strategic location of stock
- Stockholding requirement
- Order fulfilment costs
We can work closely with you to assess the impact of the most significant market issues, through structured investigation, data analysis, and computer modelling. This will illuminate pinch points in your supply chains and let you implement a plan that improves visibility, formulates contingency strategies, and improves demand forecasting – all designed to improve your profits and cut your costs.
Contact LPC International To Find Out More
To enquire about our services and find out how we can help you to optimise your supply chain and overcome the current problems, please call us today on 01285 640038.
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