How can manufacturers foresee dangerous supply chain disruptions?
If headlines on the baby formula crisis give you major deja-vu to the empty shelves of the early pandemic (and making your heart rate rise, too), you’re not alone. The baby formula shortage in the U.S. is the latest high-profile supply chain crisis causing severe shortages for new parents and their children.
While the reasons are manyfold, including the fact that the out-of-stock rates started rising in July 2021 due to pandemic-related setbacks, the primary reason for the sudden peak is that a few manufacturers essentially monopolize the U.S. baby formula industry. So when the largest manufacturer had to unexpectedly shut down their production line due to bacterial contamination in their facility, other distributors didn’t have enough inventory to cover such an emergency. And a dire emergency it is indeed.
Source: SOSA based on data from Bloomberg.
THE TAKEAWAY:
How can manufacturers prepare for the unexpected - such as bacteria infections? And how can companies foresee such dangerous supply chain disruptions? Granted, the answer to this is multipronged, but tech offers some consolation.
To start, technology that includes a combo of hardware (sensors) and software can analyze a manufacturing plant's environment and identify an infection. The tricky part is actually disinfecting the affected material. Other than novel coated antibacterial surfaces, today's option is to throw away an entire batch to avoid food poisoning, and technology is being developed (including a new patent) to better manage that entire process too.
When it comes to the supply chain, we’ve seen SaaS platforms offer agility and cost-effectiveness for our clients that can help accurately predict inventory requirements based on market trends. Moreover, advances in robotics and automation create more efficient ways to deliver and store products. Why you need a sustainable supply chain is becoming ever more clear - and as for how to make it more sustainable? Get it straight from SOSA's analysts here.