Defining the Supply Chain
A particular product’s reaching the customer requires a series of steps and networks involved in the production and delivery. All these steps and networks, such as businesses and organizations, individual people, resources, processes, and activities, make up supply chains. Some stages are raw materials sourcing, manufacturing, transportation, warehousing, distribution, and retailing.
All these parts are deeply interconnected: taking one small element out of the chain can disrupt the delivery of the product. Supply chains are aimed at minimizing the costs behind production and delivery. However, because the elements of the chains are highly interconnected and separate supply chains are interconnected as well, they can cause crises on both a national and a global level.
Understanding the Basics of the Global Supply Chain Crisis
The high codependency of the elements of supply chains means susceptibility to disruptions. Supply chain crises can be caused by various factors, ranging from natural disasters to political events, recessions, or fluctuations in product demand. When one of these factors impacts a supply chain, a supply chain crisis can result in material shortages, production delays, and even failure to deliver the final products.
One example of this is the trucker shortage: the lack of truck drivers contributes to the supply chain crisis in the US (US ports get tough with shipping lines as containers pile up, 2021). Another example is the container backlog that occurred in the ports of Los Angeles in 2021 (Ports of Los Angeles, Long Beach to fine firms over container backlog amid global supply chain disruption). In the end, both consumers and businesses are affected equally. Businesses can lose revenue and experience significant cost increases, while their reputation gets damaged as they can lose customers’ trust. On the other hand, customers do not receive the products they need, some of which are vital.
The pandemic aggravated the global supply chain problem and is still ongoing. Amanda Mull (2021) argues that “shortages in consumer goods have persisted far beyond analysts’ initial expectations, then beyond their subsequent revisions.” Another issue that causes the global and national supply chain crisis is the unprecedented consumer demand (Supply chain crisis: shipping industry leaders meet in San Francisco, warn backlog to stretch long past holidays, 2021). People buy more than previously; the increased demand, combined with post-pandemic difficulties, causes the system to be overloaded.
Personal Impact of the Supply Chain Crisis
One of my friends has been affected by the supply chain crisis. A girl I know ordered a laptop, which she needed for online classes and freelance work. She worked and studied primarily online, so a laptop was highly necessary.
When the delivery day arrived, she did not receive the laptop; in the following weeks, she did not receive any updates either. It turned out that the production of a key component had been delayed due to a natural disaster and a company shutdown. As this event occurred during the pandemic, it was hard for the girl to find an alternative option, so she could not buy a laptop for a long time, which affected her work and studies.
Future Implications of the Supply Chain Crisis
As a customer, I might be affected by the future supply chain crisis in various ways. I make most of my purchases online, and there might be future delays in order deliveries. If the product is out of stock or unavailable due to disruptions in supply chains, this can have an impact on my daily life. Moreover, these disruptions can end up causing mental distress, especially if the ordered product was essential. Sometimes, it will be necessary to look for alternative options that can be more expensive.
References
Mull, A. (2021). Stop shopping: America needs you to buy less junk. The Atlantic. Web.
Supply chain crisis: shipping industry leaders meet in San Francisco, warn backlog to stretch long past holidays. (2021). CBS Bay Area. Web.
U.S. ports get tough with shipping lines as containers pile up. (2021). Bloomberg. Web.
Ports of Los Angeles, Long Beach to fine firms over container backlog amid global supply chain disruption. (n.d.). USA Today News. Web.