Staff reduction due to Covid-19
Employee turnover rates are at an all-time high. Many have left the workplace during the COVID-19 pandemic as a result of getting sick, taking care of loved ones, or because of vaccine regulations. According to the US Bureau of Labor Statistics, up to 4 million people departed from their jobs in 2021. Because of this situation, many companies have been struggling to regain their workforce. This has left companies of all sizes with slower production capabilities and various financial strains.
When employees leave, the company’s finances take a hit alongside company morale. When a formerly strong, close-knit staff, experiences too many departures, efficiency suffers as a result. Shortly after the pandemic started to slow down and the world started to recover, political turmoil began to also wreak havoc on supply chains across the world. Hence, this is most likely another reason why you may be experiencing disruptions in your supply chain.
Political turmoil raising shipping costs
With Russia cut off from numerous global transportation networks, the global supply system is put under even more strain. This strain is extremely prevalent in the oil industry. Russia is the third-largest oil producer in the world. To put this into perspective, Russia produces on average 10 million barrels of oil daily. Due to the recent bans on Russian oil, gas prices at the pump have increased significantly. As a result, logistics companies are forced to charge more for their services, raising costs throughout the supply chain, and therefore all businesses will be affected. Consumers will be affected too since the increase in gas prices will be reflected in the prices they are paying for the products they are buying. Overall, the current political upheaval has a negative impact on the global economy, causing inflation and bottlenecks in the supply chain.
Unstable economy resulting in strikes
As previously stated, the economy is far from stable right now. There is a large gap between supply and demand. Many are frustrated with the progress that has been made to close this gap, resulting in various strikes around the world. Peru, Sri Lanka, and numerous other countries have begun rolling out waves of strikes in protest of the increase in the cost of living. Many workers have gone on strike; therefore the output of materials such as copper, tea, spices, and various other essential products has started to come to a halt.
Material shortages due to factory closures
China recently shut down one of its largest iPhone manufacturing facilities in an attempt to prevent COVID-19 spikes. Factory closures are scenarios that usually result in a cascade of negative consequences. In this case, Apple investors decreased Apple’s stock by 2.5% further dismantling the economy. This decline in shares causes a fall in total economic cash flow, which in turn causes a slew of issues such as loss of jobs and slower manufacturing. During times like these, no one is excluded from the effect of the unpredictable climate COVID-19 has created over the past couple of years. More specifically, supply chains are extremely susceptible to disruption.
Unnecessary risk-taking due to a lack of analytics
Trying to navigate through political turmoil, factory shutdowns, and COVID-19 is near impossible without the use of reliable analytics. More specifically, software designed for supply chain management. Of course, the previously discussed external factors such as COVID-19, factory shutdowns, and political turmoil won’t instantly disappear through the use of software. However, key analytics alongside scenario analysis features found in the Knosc platform can allow your supply chain to prepare ahead of time and navigate through unforeseen situations.
In times like this, every second is crucial. Knosc understands this, which is why the platform includes an easy-to-learn user interface. The onboarding process can take up to as little as 15 minutes. You won’t have to worry about learning code, algorithms, or functions, and you won’t need to hire outside data analytics organizations. To guarantee that your company’s productivity is maximized, all of your data is centralized in one place and available at any time.
Sources
What the U.S. ban on Russian oil and gas means for Americans – CBS News
Employee Turnover Statistics and Facts for 2022 (teambuilding.com)
Sri Lanka’s economy: inflation and debt burden worsen economic crisis (cnbc.com)
Oil imports and exports – U.S. Energy Information Administration (EIA)
Peru: Revoke Emergency Decrees | Human Rights Watch (hrw.org)
