7 Supply Chain Bottlenecks Your Business Will Face

Just because your supply chain works does not mean that it’s perfect. Delays in supply chains are a common issue. These delays are often caused by supply chain bottlenecks that slow down a business’ logistics. A large percentage of global supply chains have major bottlenecks that effectively slow down their business.

These bottlenecks are already the reason for the poor supply chain management. The bigger problem is that disruptions in the supply chain can cripple companies and halt their business. The Suez Canal crisis, for example, was a global supply chain issue that crippled thousands of companies.

Most businesses ignore their bottlenecks as long as goods keep flowing. However, as the recent Russian-Ukrainian conflict has shown, modern supply chains can face a lot of disruptions and hence need to be robust and resilient. You can’t make a supply chain resilient without removing these bottlenecks.

With resilient supply chains being the need of the hour, identifying and resolving these bottlenecks is important. After researching through supply chain data provided by Trademo Intel’s shipment data, we’ve found that these 7 supply chain bottlenecks were responsible for the most delays:

7 causes of bottlenecks in the global supply chain

• Single Sourcing
• Lack of business planning
• Planning silos
• Poor technology utilization
• Lack of supply chain visibility
• Poor logistics
• Port congestion

1. Single Sourcing

As covered in the supply chain resilience guide, sourcing your raw materials from multiple suppliers can help increase the resiliency within your supply chain. It is crucial for a business to not depend on one supplier for their raw materials.

Global trade post-pandemic has proven the need for having multiple suppliers. When you multisource your raw materials, you are less likely to bottleneck your supply chain and you can ensure that your products keep flowing.

Finding new suppliers can be challenging. With Trademo Intel, you can study global shipment data and find the perfect suppliers for your supply chain.

2. Lack of Business Planning

Supply chains that depend on global suppliers are usually very complex. To get a commodity from one part of the world to another involves multiple carriers, trade compliances, and more.

A business needs to visualize and plan all parts of its supply chain. Failing to do so can lead to crippling bottlenecks that will bring your business to a halt. It is important to have data-driven supply chain management strategies and a defined supply chain roadmap.

3. Planning Silos

As mentioned in the point above, a good supply chain management strategy helps avoid bottlenecks in your supply chain. However, just having a plan isn’t enough. The average supply chain strategy will involve multiple companies and teams within your business.

Suppliers, NVOCCs, warehouses, inventories, and more need to coordinate to implement your supply chain strategy and avoid supply chain risks. Your business needs to ensure that it can visualize, sync, and streamline the processes for all these wings. Letting each component plan its own strategies will lead to individual planning silos. Let’s take an example.

An NVOCC with a delivery due date reaches on time. However, the warehouse that is meant to receive the raw material has a different roadmap and still has old raw materials yet to be used in production. This creates a bottleneck for your supply chain.

Your business needs to keep all the parties involved within the loop to ensure such bottlenecks can be avoided.

4. Poor Technology Use

Once you create a supply chain management strategy, you will definitely use supply chain software for your needs. You need to share this IT infrastructure with the businesses and teams involved within your supply chains.

Say you have four different suppliers for your products but you only share your technology with two of the suppliers. Where do you think the supply chain bottleneck will spring up? Of course, it’s going to be the two without any IT.

Utilize the technologies you’ve invested in wisely and keep your supply chain transparent to avoid bottlenecks. For example, if you’re using Trademo Intel to track your shipment data in real-time, ask your teams to use it too. It will ensure that all of you can accurately track where your shipments are.

5. Lack of supply chain visibility

Reiterating the point given above, transparency in your supply chains is important. How will you figure out what’s wrong in your supply chains if you do not visualize it?

Using the technologies at your disposal, keep a close track of your supply chain and the various activities involved within it. This visibility will help you understand various bottlenecks and deal with them quickly.

6. Poor logistics

The biggest challenge your supply chain management strategy can face is logistics. It is likely that your logistics will depend on firms outside of your control. The only way to ensure that logistics don’t become your biggest supply chain bottleneck is to plan an entire strategy with your logistics network.

Analyze logistics companies for yourself and create a logistics network that will ensure that the products you need reach you in time. One way to identify logistics companies is to use shipping data to create a list of carriers that work within your supply chain routes. You can use Trademo Intel for that! We recommend that you request a demo with us and learn how you can find your next NVOCC.

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7. Port congestion

One of the greatest challenges businesses saw in 2020-2021 is port congestion. Ports around the world have been facing a lot of congestion due to rising business requirements and mismanaged supply chains.

Port congestion can increase your costs and lead to stuck goods. Since you cannot do much to tackle port congestion yourself, you need to create a resilient supply chain structure. A resilient supply chain will be able to keep functioning long enough until your cargo clears the congestion.

Summing Up

Bottlenecks in the supply chain are inevitable. However, the 7 supply chain bottlenecks mentioned above can be circumvented if your business spends enough time developing a resilient supply chain strategy.

A resilient supply chain strategy will reduce the bottlenecks your supply chains will face. With the help of supply chain intelligence tools from Trademo, you can start working on optimizing your supply chain.