No let up in sight for supply chain disruption

Transportation difficulties and logistical bottlenecks will persist well into 2022, meaning companies must continue to think carefully about inventory and supply chain management, experts warn.   

According to global supply chain platform project44, the legacy of COVID-19 and ongoing supply chain problems are set to continue for some time to come, particularly in the maritime industry.

The average shipment delay from China to Europe, for example, rose to 6 days in December 2021, having fallen for several months. Given the backlog of containers at ports and tight ocean shipping capacity, project44 said it was unlikely that transit times for global shipping will return to the pre-pandemic levels during the first half of 2022.

COVID-19 is continuing to have a significant impact, with shipping delays now routine and many ports in logjam. The number of ‘blank sailings’, where ships miss out on ports altogether, is rising and expected to continue well into 2022. China’s zero-COVID policy also means the risk of major port closures and manufacturing delays are never far away.

Unpredictable lead times, combined with rampant price inflation, mean some companies may face an extended period where it is difficult to manage inventory effectively and keep cashflow problems at bay.

As Rachel Baldry, Manufacturing Advisor at GC Business Growth Hub, explains in her recent blog, inventory management is a valuable skill In times of uncertainty:

“The COVID-19 pandemic, along with a supporting cast of other troublesome events, has resulted in a prolonged period of disrupted supply and erratic demand. Many manufacturers feel under pressure to build up ample safety stocks, but that can be a dangerous tactic. In this environment, effective inventory management can be invaluable.

"Good inventory management simply means having the right quantity of the right thing, in the right place, at the right time. It’s a subtle art – failing to hold enough inventory may leave you unable to meet customer demand, but hold too much and you risk a cashflow crisis and a host of other operational issues.”

Our specialist Manufacturing Advisors can offer tailored one-to-one support for Greater Manchester SMEs to tackle all of your manufacturing challenges Manufacturing Service.