It's A Logistical Domino Effect for the Supply Chain

A strong supply chain systems stands on several planks that make up its service platform. Those planks have always existed in logistics, but they are now ever more critical in today’s business world. Globalization, increased sub-contracting for manufacturing parts, transporting those parts for assembly, and then transporting the finished products to the customers who, themselves, may be spread across the world really do mean each of those planks is more critical than before. 

When the chain is longer, and each link is subject to more complicated – and less controllable – forces, managing the logistics gets more difficult. It really does become a logistical domino effect.

The Forces in Play

Some of the forces that can snap or weaken a link (so it snaps later) include the obvious and long-standing:

• Buying on lowest cost to satisfy the latest CFO dictat.
• Treating each link in the supply chain as though it acted in isolation from the rest of the chain.
• Increased competition, which encourages companies to cut corners in the hope they will save on production and delivery costs without impacting quality.
• Poor quality control within one or more of the suppliers' production systems.
• Physical material failures that slow or stop delivery. These include things like a loading crane failing, a tsunami in a sea lane, new equipment being installed taking longer than expected to get up and running.

The latest forces that can weaken or snap a link include:

• Different legal standards that may meet a national requirement, but do not necessarily, meet those in a different country.
• Language and reporting  differences.
• Technology, networking and other communication differences.
• The "I want it now" position that many consumers have because their own technology has given them previously unimaginable data feeds from their smart phone.

The Take-Away

Every one of these factors - traditional and newly-introduced - have a domino effect in the supply chain down-line. The broken link gets fixed, and it immediately causes another potential domino to fall. After one broken link is repaired, manufacturers and transporters, then have to make up for lost time. The "rush to complete" their link in the chain can cause a new problem that didn't exist before.

The Solution is to plan well, prepare well, allow for unforeseen problems, communicate well and continuously. This helps the down-line know what to expect, so the people who manage those links can plan ahead and prepare to minimize the up-line link breakage. This is the only way to stop another domino from falling.