5 Major Risks in the Global Supply Chain

Global Supply Chain - Complete Controller

The smooth operation of a sophisticated supply chain is the foundation of the modern economy. On-time delivery of products gives businesses multiple benefits. Reducing the product’s retail price and improving innovative technologies/life-saving medicines lead to new markets. These factors also bring business opportunities for manufactures.

Supply chain disruptions are rising due to fraudulent activities that have become a common occurrence. According to Deloitte Touche Tohmatsu Limited,

85% of surveys reveal that global supply chains experience at least one disruption within a year.

Transport problems, theft, natural disaster, weather issues, cyberattacks, and poor quality of products expose the supply chain to many challenges. Local, national, international trade and regulatory policies can also disrupt modern supply chains’ fundamental economics. Check out America's Best Bookkeepers

The companies that proactively manage supply chain operations can save money and effort. They are at a 50% lower risk of spending more on supply chain disruption than those who aren’t taking proactive steps.

Unawareness regarding global supply chain perils might lead to high freight expenses and reduced brand reputation. You must know at least the most major global supply chain hazards to minimize their impact.

Let’s learn the top global supply chain risks that your company should consider.

Global Trade Wars

Tariffs on new imports affect the global supply chain of a wide range of consumer products and industrial elements. The trade fight between America and China has integrated into the conflict with other countries, especially the European Union (E.U.). Businesses start adjusting their supply chains to the new arrangements.  

According to Supply Chain Quarterly, in 2018, American motorcycle maker transferred their factory-made products to Brazil and Thailand destined for E.U. markets. The researchers expect that this practice will speed up as World’s superpowers impose more tariffs on global trade. Check out America's Best Bookkeepers

German Carmaker BMW starts thinking of transferring his Mini brands from the U.K. to the Netherlands. He also plans to make Support Utility Vehicles (SUVs) for China. Honda has also decided to switch its flagship plant in Swindon, the U.K., by 2021.

Maintain a stricter level of compliance in trade activities. It will protect you from the enforcement of more tariffs. Shippers should hire a non-associated carrier (third-party) to manage all trade requirements.

Economic Crisis

The Lucy Dixon of Supply Chain Digital declares economic instability as another threat to global trade or supply chain.  For example, the South Korean Company’s global supply chain shipping capacity (Hanjin Shipping) was dramatically reduced due to bankruptcy. The dropped capacity ratio was 3%, and the South Korean government couldn’t dock freights of $14 Billion.

You can reduce this risk by increasing employment rates in the countries you are working in. For this, you can launch training programs for secondary school students. It will encourage them to supply chain careers and engage them with the community.

Natural Disasters

Earthquakes and famine can severely affect the global supply chain. Around 47% of shippers don’t have a backup plan for fighting any natural disaster or major equipment failure.

Make a strong and effective plan for ensuring continuity following a natural disaster. The strategy should include the devotion of resources to maintain global trade operations. The plan must support the usage of cloud-based tools as well. Check out America's Best Bookkeepers


The connectivity of modern systems can disrupt the global supply chain of world trade. If you integrate the systems with open-source software and alter the system, it will increase supply chain perils. The alteration of new upgrades may not be a pocket-friendly. Don’t try to integrate inadequate systems as it can cause bottlenecks and disruptions.

It would be best if you created a backup data resource and decentralized data storage. The connectivity of your supply chain system must be secure. Refresh the system and remove all errors from the systems, like encryption of electronic devices. Don’t make unnecessary alterations while integrating your system. Hire professional integrators for your supply chain system that can enhance efficiency and profitability.

Consistency in Supply Chain

The disruption in supply chain consistency can be the major risk for achievement. The J. Paul Dittmann, Ph.D. Executive Director, Global Supply Chain institute University of Tennessee says,

Around 45% of global trade suppliers can continue their work after any catastrophe.

Supply chain consistency can severely affect the manufactures and ruin their work. As in, the supplier may face disruption in the supply of raw and reclaimed materials.

Procurement departments must ensure consistency in the supply chain. For this, they have to create a diverse supplier network. Expand the routes of available carriers to make useful changes in global supply chain operations.

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