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Supply chain failures take spotlight

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At the end of October Apple CEO Tim Cook cited supply chain difficulties for the loss of $6 billion in sales. Today’s consumer index report shows the price of used cars and trucks up 26.4%, largely due to the unavailability new cars due to lack of components. Supply chains have suddenly become news.

In the first week of November the White House announced that it would publish a dashboard of metrics tracking progress within the US supply chain in the ports of Los Angeles and Long Beach and throughout the US economy.

The dashboard shows that rather than supply chains failing, disruptions are being caused by their saturation. 

According to the White House dashboard the greater amount of goods moving through the US transportation and logistics supply chain are the principal cause of congestion. Between January and September the US imported 7 million loaded containers, 18%  higher than the previous  record over the same period from 2018.

This boom in commerce is driven by the lower spending on services such as vacations and higher spending on goods during the pandemic, according to the White House. As the pandemic fades spending on services is expected to increase, lowering the pressure on the logistics supply chain. Meanwhile retail inventories, aside from the car industry, have returned to pre-pandemic levels.

According to consultancy McKinsey changes in the environment and global economy have been  increasing the frequency and magnitude of shocks, which may disrupt supply chains. The report cites declining political stability, exposure to cyberattacks and increasing interdependency of supply chains and data flows among the reasons for increased exposure to supply chain disruption.

According to a survey held by the consultancy respondents from the automotive, pharmaceutical, aerospace and electronics industries stated that their industries had experienced material disruptions lasting a month or longer every 3.7 years on average. 

By Staff

Tags: failuresSupply chain

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