by Laura Ross
For Thomas.net
Image Credit: Gorodenkoff / Shutterstock.com
A logistics bottleneck describes what happens when a specific link in the supply chain fails to operate as usual and keep up with client or customer demand.
Worryingly, just one small hold-up can be enough to impact the entire supply chain — causing production and shipping delays, high costs, backlogs of orders, unhappy customers, and disgruntled workers. Because of this domino effect, it’s important to identify (or better still, prevent) any bottlenecks within the supply chain so they can be quickly resolved.
What Are Some of the Most Common Types of Logistics Bottleneck?
Here are some of the blockages most likely to occur within the supply chain:
Poor storage methods – This can result in damaged or spoiled components or products. Examples of this include fresh produce not being stored at the correct temperature or shipping containers being over-filled and leading to breakages.
Inefficient operating processes – Clunky operating processes, which typically arise from lack of communication and failure to plan effectively, can lead to a blockage at any stage of the supply chain, whether it be manufacturing, packaging, shipping, or warehousing.
Poor inventory management – Organizations have long operated just-in-time (JIT) supply chains. This means they don’t typically store large quantities of additional inventory to account for disruptive events. In a post-COVID world, many businesses have recognized that this method of supply chain management is untenable. Another challenge surrounding inventory management is that organizations often fail to accurately predict surges or dips in customer demand.
Lacking supply chain transparency – If an organization doesn’t have visibility into what’s going on at each stage of the supply chain, it’s difficult to identify problems and make improvements. With improved transparency meaningful changes can be made, whether it’s re-routing the supply chain, finding alternate suppliers, or investing in additional warehousing.
Limited resources – Sometimes all the right cogs of the supply chain will be in place, but there are insufficient workers to operate them. In other cases, employees might not have the resources, equipment, and technologies to work efficiently.