Even though supply chains can be extremely complicated, things can go wrong with them quite easily at times. Failing supply chains can have a lasting and memorable effect, as demonstrated by some of the cases listed below, whether the cause was an internal error or an external factor beyond the control of the company, like the pandemic. Let us analyze the top Supply Chain Fails and how the companies and workforce are tackling the same with reference to the Logistics Courses in Kerala.
What might go wrong in a supply chain?
Prior to delving into the instances, the following are some causes of supply chain failure, as per a report released by risk management experts Air mic:
Offshoring means it may be challenging to monitor activity.
Growing supply chain complexity–which makes it unclear to what suppliers subcontract–and cost pressures–which force businesses to make moral and/or ethical compromises
Manufacturing firms are more susceptible to a localized disaster due to geographic clustering.
Contemporary communications can swiftly harm a person’s reputation.
Just-in-time manufacturing techniques have shortened the recovery period following a supply chain breakdown.
reliance on several suppliers, which may make one more vulnerable overall.
Instances of supply chain breakdowns
Boeing’s 787 Dream liner production
Early in the new millennium, Boeing, the American multinational aircraft manufacturer, effectively marketed the concept of its new 787 Dream liner aircraft. The aircraft would have the most innovative design in the history of passenger aviation, according to the company, which also promised record-breaking production times. Because airlines took them at face value, it became the fastest-selling aircraft in aviation history. Naturally, Boeing also had the confidence to introduce their new aircraft using a novel and untested technique.
Boeing made the decision to outsource portions of its operations in order to swiftly and affordably reach its objectives. Its outsourcing of core functions resulted in a complete reliance on more than 50 suppliers, which was a significant error. As a result, there was no way for the responsible parties to monitor the situation, which created significant problems with quality control. Due to overheating lithium-ion batteries that were starting fires inside the aircraft, flights were grounded. The aircraft wasn’t supposed to go into commercial service until 2011, even though the company had planned to test it in 2007 and finish the first delivery in 2008.
The lack of chicken at KFC
You think of chicken when you think of KFC, am I right? Therefore, it was unavoidable that the massive fast-food chain would have to suspend operations in the UK in 2018 as a result of a chicken shortage. A number of KFC’s UK locations were forced to close as a result of issues with D H L, the company’s new food service supplier at the time. Store closures were among the problems, along with issues with supervision and unsuccessful deliveries.
The supply chain broke down due to a number of factors from both KFC and D H L. KFC may have made the biggest error in selecting D H L in the first place because the company lacked the knowledge and experience necessary to properly carry out this role because it had never worked with chilled foods before. Additionally, D H L only had one distribution center in the UK, which meant that all of its business’s resources were consolidated into one location–a foolish decision given the size of the company. The failure was also caused by KFC-related management problems, such as inadequate due diligence and the absence of backup plans.
General Motors and the catastrophe with robots
The multinational American automaker General Motors (GM) started a billion-dollar robotics project in the 1980’s. Robert Smith, their creative CEO at the time and eventually fired, rushed the process without thoroughly evaluating all of the options. Soon after the robots were deployed to GM’s production lines, they began to damage the entire plant’s production line by smashing materials and painting themselves. Not exactly what you expected to see for millions of dollars. Indeed, GM could have purchased both Nissan and Toyota with the money that was spent on the robots–ouch!
This disaster had far-reaching effects. The inability of GM to manufacture or distribute goods efficiently or rapidly caused a sharp decline in sales. More losses resulted from the company having to spend millions of dollars to fix the robots. Competing businesses exploited this setback, leaving GM behind.
Hershey’s meltdown over Halloween
Many people associate Halloween with sweet treats, so when food giant Hershey’s failed to deliver, consumers were left with a bad taste in their mouths. To try to enhance its supply chain, Hershey invested more than $100 million in a new order management, planning, and C R M system in 1998-1999. The company’s belief that it could execute each of these components simultaneously was the source of the issue.
Since April 1999 was not met, the roll-out date was rescheduled to the summer, when the majority of Halloween orders are placed. Significant problems arose after its release. Despite Hershey having the products ready, the system prevented them from being delivered to customers because orders could not be processed and inventory was not visible. The business lost out on about $150 million in orders, and its quarterly earnings decreased by almost 20%.
The following lessons can be drawn from these errors as remarks:
Cautiously take into account your outsourcing choices:. Maintaining control over suppliers is essential for supply chain management. To guarantee that quality control can continue, any subcontractors should be closely watched. To lessen the chance that they will make mistakes that could be prevented, it is also crucial that the suppliers have previous experience and track record of success in the industry.
Attempt earlier than your purchase: It’s important to thoroughly investigate all of your options before making a decision. The option that is selected must be effective, whether it is for investigating possible systems, products, suppliers, or anything else. Making costly mistakes can result from rushing into things without conducting adequate testing or research first.
The key is to plan. Plans for contingencies and risk management are essential because things do go wrong sometimes. Establishing dates and deadlines for tasks is also crucial because it ensures that everyone involved in the supply chain is on the same page and that things can be implemented on time.
The dream can only be realized in collaboration. In the supply chain, communication is essential in all facets. Better results can be achieved by cooperating effectively and being clear with suppliers about expectations. It is imperative that teams deliberate over options prior to making a definitive decision. Exploring Logistics and Supply Chain Management Courses in Kerala to Tackle Supply Chain Failures Effectively will be the ideal option for getting recognised in the field which is getting competitive day by day.