The Supply Chain Challenges That Businesses Are Currently Facing
Logistics have always been the most unpredictable part of businesses since it involves numerous valuables and there are a lot of things that can go wrong at any given time. However, the arrival of the global pandemic, as well as environmental disasters and geopolitical conflicts all around the world, has created numerous challenges that affect everyone including fashion retail outlets, organic ingredient suppliers, and so much more. Here are some of the supply challenges that have arisen in the recent years:
Insufficient material supply had been a problem even before the pandemic started. However, the current situation has exacerbated the issue, which is now affecting both big ingredient distributors, as well as small retailers. Businesses now have to raise enough working capital and take other steps to make sure they’re ready to face peak seasons and prevent stockouts and customer disappointment.
The scarcity of raw materials have greatly ramped up their prices, making them even more inaccessible for businesses that are running with limited capital. And it’s not just materials that are becoming more expensive: freight costs have also increased due to the surge of ecommerce sales incited by widespread lockdown measures in many countries. This, in turn, has led to a higher demand for container shipping services (both for manufactured consumer goods and raw materials), causing freight rates to rise to 200% and even more depending on the area.
While freight costs have indeed increased, this hasn’t stopped many companies from continuing to ship out raw materials and deliver consumer goods to their customers’ doorsteps. As a result, congestion has become a problem in many countries, creating global bottlenecks that have significantly affected supply chains, like organic ingredient suppliers, in all parts of the world. Port congestion isn’t just caused by higher shipping container volumes, though. Labor shortages along with social distancing protocols have greatly increased the loading and unloading times in a lot ports, preventing ships from sailing out on time and making it difficult for businesses to adhere to their delivery commitments.
Changing Customer Behaviors
Supply chain management isn’t just about delivering the right amount of products within a certain length of time. It’s also about predicting future consumer demand so that companies can adjust their manufacturing operations appropriately. Unfortunately, demand forecasting is now more difficult since most consumer behaviors have changed due to the pandemic. Specifically, consumers now shop for more items online than in-store, and they expect bigger inventories and faster delivery times along with a more positive customer experience. The good news is that many businesses have adapted to the change by using inventory management software, investing in multichannel order fulfillment solutions, and taking other steps to improve their supply chain flexibility.
Supply chain challenges have become more rampant nowadays, but businesses can rise about these difficulties by adapting new methods and tools and being more flexible in their overall approach. If you’re looking for trusted local suppliers for ingredients and packaging materials, reach out to Rapid Food Solutions! We are one of the best private label food manufacturers in the area, and we offer world-class ingredients for bakery, beverage, and confection companies as well as other types of businesses. We also provide personalized food containers that will keep your products fresh and attractive and help you promote brand recognition. Learn more about our top-tier solutions by calling our team now!