Just as process safety experts evaluate the severity and frequency of potential incidents, suppliers, system integrators and end-users can investigate the upstream and downstream links in their supply chains, identify definite and possible hurdles, gauge likely impacts, and develop responses. The primary supply chain variables are:
- Distance—More miles logically means more obstacles. Ground, maritime and air modalities each present different issues, such as events like the recent Crowdstrike computer glitch that halted and delayed many U.S. flights.
- Natural causes—Beyond the obvious oceans and mountain ranges, where container ships can get stuck or sink, and trucks can lose their brakes or crash, increasing hurricanes, storm surges, flooding and wildfires attributed to global warming are damaging vulnerable communities and supply-chain participants. Even ash from volcanos can disrupt flights and supply lines, which occurred in Iceland and Europe several years ago.
- Human conflicts—The ongoing invasions in Ukraine and Gaza are just the latest in an endless series of regional wars and repressions that not only destroy people, homes and local economies, but can sever supply chains and indirectly hinder manufacturers worldwide.
- Costs—Shipping expenses are just the beginning. Scarce raw materials and long lead times for microprocessors and other parts can make products and projects prohibitively costly. These must be weighed against the expense of reshoring and producing products locally, which can mean far higher labor costs.
- Technology profiles—Because basic hardware and parts can often be made by multiple companies in many places, it’s easier to diversify suppliers for them, they’re typically easier to reshore, and their lead times can be shortened quickly. However, more complex, specialized and proprietary products are harder to produce, and often involve added partners and supply chain links, which keeps their lead times longer and persistently difficult to reduce.
- Over-ordering and overstocking—previous scarcity drove users and suppliers to order more materials and parts earlier, but this left them with excessive and costly inventories once the shortages waned.
