Everything You Need to Know About the Global Supply Chain Problem

Everything You Need to Know About the Global Supply Chain Problem

Over the years, online shopping has become easier and more convenient than ever. People became accustomed to ordering goods online and having them delivered directly to their door within just a few days. More recently, people are now having to wait weeks or longer for appliances, electronics, and other goods. So, what happened? Major disruptions within the global supply chain are affecting the availability of materials, shipping processes, manufacturing capabilities, and more.

What Is a Supply Chain?

Companies started to outsource the production of more sophisticated products in the 1970s. This often meant having multiple contractors produce and assemble components. Typically, a company in the U.S. will design a product, turn to one or more foreign manufacturers for raw materials and components, and put on the finishing touches back at home. They’ll then need some combination of planes, ships, trucks, and warehouses to move products and store inventory.

What Caused Supply Chains to Break?

The COVID-19 pandemic first caused a blow to Chinese manufacturing plants. Workers became infected with the virus, and factories either reduced production or closed. Soon, the virus spread to other global manufacturing sites around the world. Logistics companies were also affected since they ship, store, and deliver these goods. While supply was decreasing, demand was growing.

The Supply Chain Issue Today

Manufacturers today face many issues along the supply chain due to rising labor, transportation, and logistics costs and a limited supply of resources. Another concern is how the virus has made it harder for transportation workers to cross borders. Countries came up with their own regulations for controlling the virus, which backed up transportation workers at freight hubs. Raw materials are not getting to factories in a timely manner, delaying the production of packaging materials and other goods.

The Trouble for Factories

To keep up with demand, many factories tried to increase production, but they usually need components from outside sources to finish making each product. The cost of packaging materials made out of plastic, paper, and cardboard is also increasing sharply due to the high demand and low supply. Meanwhile, transporting goods is going slower than usual, and many finished products are sitting in warehouses and ports due to a shortage of shipping containers.

When Will the Shortages End?

No one really knows when the shortages will end, but they’re expected to continue well into 2022. In an effort to speed up the process, in October, the Port of Los Angeles started operating 24 hours, 7 days a week. This follows the same effort that the Port of Long Beach announced weeks prior. Both ports account for 40% of all shipping containers that enter the U.S., and these extended hours may help to reduce a backlog of cargo.

Manage Your Supply Chain With Custom Technologies

Rely on Custom Technologies to manage your supply chain and cover your shipping and warehousing needs. By staying up-to-date with technology, we help clients make informed decisions during these supply chain issues. Is the material you use unavailable? We’ll find and recommend a comparable one. Is your packaging usually molded? We may be able to laser-cut it in the meantime. Our knowledgeable and skilled team will find alternative resources to help you overcome any obstacle. To learn more about what Custom Technologies can do for you, contact us today or visit customtechnologies.com.