Nothing has highlighted the importance of a fully functioning supply chain — the network of players involved in getting products to customers — than the COVID-19 pandemic. Products such as toilet paper and personal protective equipment (PPE), incuding masks, face shields, gloves and hand sanitzer, are in great demand but short supply.

Often, it takes just one link in the supply chain — be it producers, vendors, warehouses, transportation, distributors, retailers and any other supply chain players — to be broken or compromised to impact all of the other links.

Following are a just a few of the most common reasons for disruptions to the supply chain.

Figure 1. A single breakdown can lead to supply chain instability. Source: bakhtiarzein/Adobe

Natural disaster

Earthquakes, hurricanes, wildfires and tornadoes can halt even the heartiest of supply chains. These can knock out key transportation links and utilities, halting commerce for regions and entire industries. And if the disaster occurs in a region that exclusively provides materials or products – such as produce from Florida or electronics from California – supply chain outages could be long-lasting.

An extreme example of how a natural disaster can disrupt a supply chain happened in 2005 when Hurricane Katrina hit the Gulf of Mexico coastline, which is home to 20% of the U.S.’s natural gas production. The region was decimated, as the storm destroyed homes and shut down crude oil and natural gas production in the Gulf, as well as numerous refineries. Shortages became commonplace; some gas prices rose by 50% as a result. And it took months for these facilities to come back online.

Supplier issues

The role of the supplier in the supply chain, like all other players, is a critical one. As such, when a supplier issue arises, such as a supplier filing for bankruptcy or experiencing a materials shortage, it can have a ripple effect that reaches across the globe.

A recent example of a potential materials shortage, which has not yet been felt, is again the result of the COVID-19 pandemic. China, which is believed to be where the virus originated, is a supplier of critical raw materials for prescription drugs and pharmaceuticals. Because China was almost entirely shut down in the early days of the pandemic, experts anticipate that a possible consequence of the pandemic will be a slowdown in the production, distribution and the availability of pharmaceuticals around the world, jeopardizing future supplies.

Geopolitical instability

Locations where a critical supply chain component lives, disrupted by war, civil unrest, tariff hikes, rioting and protests, can be detrimental to the supply chain as was seen in recent months.

With recent social justice protests disrupting many U.S. cities, popular retailers like Target and Walmart were forced to temporarily shutter their businesses and readjust their hours of operation to protect their employees and customers, subsequently severing the final, critical link in the logistics chain – the point of sale.

Cyber attack

Sophisticated as technology has become, there are still critical gaps in how sensitive data is protected. Systems designed for warehousing supply chain data, for example, can be vulnerable to ransom wear and data theft. Earlier this year, the FBI issued an advisory to supply chain businesses that a malware called Kwampirs was attempting to steal sensitive data from digital supply chain networks. Although cyber attacks can usually be contained once identified, supply chain operations may halt during the response for damage assessment, and customers are more wary about working together going forward.

Transportation failures

Various links in the supply chain are heavily reliant upon transportation, whether it is shipping raw material from the supplier to a producer, or transporting end-products to retailers, transportation is a critical link in the supply chain. Disruption via factors such as weather, traffic, regulation changes, damage or theft can handicap the entire transportation component of a supply chain.

There are many moving parts that make up a supply chain. These are just a handful of possible ways in which the supply chain is vulnerable.