The global supply chain is a complex network of manufacturers, suppliers, transportation companies, warehouses, retailers, and more. This interconnected web works to provide consumers with the products they want and need on a daily basis.
When any part of the supply chain falters, it can cause major ripple effects across businesses and industries worldwide.
The last few years have resulted in many supply chain disruptions that still leave many brands and consumers vulnerable today, despite warehouse management efforts in-house.
As the holidays approach, let’s take a look at some of the long-term problems supply chain disruptions can cause beyond the warehouse and how a third-party logistics team like GFS Logistics can help mitigate issues in the new year.
Product Shortages
One of the most immediate effects of supply chain issues is shortages of products. If a key factory has to shut down due to unforeseen reasons, it obstructs the flow of goods.
Manufacturers then have trouble supplying their products to retailers. Consumers soon find empty store shelves where those items usually sit.
Product shortages mean lost revenue for both retailers and their suppliers. Out-of-stock products also frustrate consumers who expect to have easy access to the things they want to purchase.
In a world where everything is seemingly instantly available online, today’s consumers have little tolerance for waiting on back-ordered items in store.
If a retailer can’t provide the goods promptly, customers go elsewhere.
Higher Prices
Slow supply chains also lead directly to higher prices for consumers. When supply is constrained, but demand stays strong, retailers raise prices to protect dwindling profit margins.
We’ve seen this recently with national surging inflation rates across many sectors.
Issues like shortages of microchips, labor challenges in manufacturing hubs, and port congestion result in low supply and high demand. That leads to rising inflation and more financial struggles for consumers. While we can’t control the shipping rates and routes, a 3PL team like GFS Logistics can use our logistics management skills to help find the fastest, most affordable shipping routes that ensure people won’t end up paying more for essentials and gifts during the holidays.
Company Instability
Prolonged supply chain problems can seriously jeopardize the financial stability of companies that rely on smooth operations. Businesses with cash flow issues face impossible choices between increasing prices, cutting capacity, laying off workers, or even shutting down entirely.
Small businesses with less access to capital have the hardest time riding out long disruptions. But even giant corporations can suffer from lost revenue and face falling stock prices when supply chains falter. The ripple effects across the business landscape are massive.
Job Loss
Supply chain disruptions often beget widespread job loss, especially in the manufacturing and transportation sectors. When factories can’t get parts to make their products, they must stop production lines and lay off workers.
Trucking and shipping companies also let people go when there is less demand for moving goods.
The loss of these essential supply chain jobs impacts families and entire communities. More unemployment leads to broader economic decline as people reduce spending.
Keeping your supply chain flowing is essential to more than your bottom line. Working with a 3PL that specializes in supply chain management via advanced technologies like warehouse management software (WMS) can increase revenue, save jobs, and keep your community thriving.
Long-Term Planning Disruption
Finally, supply chain chaos makes long-term planning very difficult for companies. Predictability and stability are the keys to mapping multi-year strategies and making smart investments for the future. Most businesses operate with razor thin margins of error and demand forecasting is critical.
When companies can’t accurately forecast inventory costs, manufacturing throughput, transportation availability, and consumer demand, they struggle to plan.
Supply chain uncertainties require contingency planning and reduce willingness to expand. This hesitation dampens economic growth and innovation.
Once again, partnering with a team like GFS Logistics takes the headache out of supply chain uncertainty because we put them under the microscope and find quick, effective solutions.
Our convenient Dallas, Texas, location puts us at the epicenter of the national supply chain hub. It lets us help our clients make fast decisions on demand forecasting, shipping route changes, software upgrades, and more.
Reduce Supply Chain Vulnerabilities with GFS Logistics
The vulnerabilities exposed in the last few years are here to stay for now. As companies are forced to build more transparency, flexibility, and resiliency into their supply chains, they need a helping hand to stay on top of their markets.
GFS Logistics is here with arms outstretched to help brands large and small get over supply chain hurdles and ensure issues don’t have a rippling impact on their bottom line, employees, and communities.
Tackle the new year with confidence and our GFS Logistics on your side! Contact us today to learn more about our services.
