The Supply Chain Crisis

With suppliers and manufacturers from all industries encountering several supply chain challenges right now, the ambiguity and shortages are impacting our industry significantly including pressure on pricing, meeting increased demand for products and operational efficiencies. We have shown some of the contributing symptoms of the current crisis below:

For one there is a lack of qualified workers available right now. One of the major symptoms impacting our industry is the lack of a fit and available workforce. As is the case with our local and international logistics sector, our factories and facilities are too faced with continued labour shortages. Because of this, businesses are being forced into either hiring of temporary workers or to skill and equip existing employees to fill the void.

Secondly, we are experiencing manufacturing backlogs. Stock management is vital to supporting profitability and supply chain productivity. Companies strive to keep optimal inventory levels to ensure best customer delivery expectations whilst accruing minimum storage and logistic related costs.  Companies are faced with the juggle of inventory requirements versus increased customer demands, delayed shipping schedules, and cost-related factors.

There is also a shortage of raw materials. When raw materials such as metals, glass, and of course food and ingredients become scarce, prices head north causing a tap on affect to the end user and consumer. Further pressure is placed on businesses managing demands and remaining competitive. Stockpiling seems the obvious answer, however not always feasible when it comes to perishables and managing cashflow and storage costs.

On the upside there is a strong movement and demand for local produce and product with suppliers being forced to look at alternatives to ensure they keep up with their supply.

Also, the global sea-freight cargo sector is predicted to continue to endure port congestion and delays with record low-inventory levels being reported, robust consumer demand. There are reports of yard deployment in some large international ports operating at over 100 percent; 80 percent is considered full capacity. Consistent demand, coupled with heightened labour shortages, will continue to place pressure on capacity and result in delays that we have been experiencing in recent times. Last year’s six-day Suez Canal blockage, which suspended vessel movement in one of the world’s most important waterways, is a prime example of how vulnerable we are to the current climate across the globe.

According to ‘2022 Annual Supply Chain Risk Report’ from Everstream Analytics, worldwide water instability is outlined as one of the top 5 supply chain risks that global companies should prepare for.

This threat is in 5 out of 11 global regions that now see water stress values above 25%, and includes two regions with high water stress and one with extreme water stress, according to the UN, two-thirds of the global population will face water shortages by 2025. This threat is escalating directly as a result of population growth, swift industrial and urban development, as well as an increase of extreme weather events such as drought and floods.

Regardless, our team of innovative and agile recruiters are here to make your life easier and find the right person for the job! Get in touch to find out more: david@maydayrecruitment.com.