Sanctions and Countersanctions: Additional Supply Chain Disruptions

On February 24th, Russia invaded the Ukraine. The human suffering and devastation this invasion has caused is beyond belief. But as I said in a blog on this subject in early March, I do not write about governments, politics or global conflicts. I am a supply chain guy; this is a supply chain blog.

?In my early March blog, I wrote about how the invasion has destabilized global supply chains and limited the availability of critical commodities like wheat, corn, barley, potatoes, aluminum, ammonia, uranium, titanium, manganese, iron, mercury, palladium, diesel fuel and many others.

But beyond such shortages, the war’s supply chain disruptions have smacked many suppliers in the face. Sanctions and countersanctions are preventing many U.S. and European businesses from obtaining needed manufactured components, a huge wake-up call about the interconnectedness that comes with globalization.

Just last week, I learned about a supplier in Poland who stopped shipping because – despite its location in Poland – a sanctioned Russian enterprise owned the company.

Unbelievable as it may seem, many companies still do not really know their Tier 1 suppliers, let alone their end-to-end supply chain. COVID-19 was a huge shock to supply chain, but the Russia-Ukraine war are having major impacts and, just like COVID-19, the impacts will live even after the war is over. All companies must arm themselves with knowledge of their suppliers and embrace technology that allows them to digitize their supply network and synchronize their supply to consumer demand.