What Issues Did the Supply Chain Face in 2022
The supply chain supports each industry, and any disruptions can be felt across sectors in every country. 2022 saw some wide-ranging changes in the supply chain, with disruptions coming from each area. Whether it was a rising cost in raw materials, labour strikes, or even catastrophic weather changes, the supply chain saw it all in 2022.
And no one was spared from this. Big businesses to small felt the impacts of late deliveries, stock loss, and more. From warehouse workers to uniform suppliers, it was a challenging year.
Here at Jermyn Street Design, we are going to explore some of the factors which affected the supply chain in 2022 and what we might expect to cause further problems in 2023.
Cost-of-living crisis
The cost-of-living crisis has not only had an effect on the general public trying to keep their heating on, but it has also affected the ways businesses operate. As raw materials continue to rise in price, product prices rise too. This has led to problems in the supply chain, with the cost of creation sometimes outweighing demand. And it is not only the price of raw materials which has grown to cause disruption within the supply chain but also a rapid increase in energy prices has made transportation scarce. Businesses which continue to deliver are seeing increasing associated costs, whereas smaller businesses may be pushed to limit free delivery options or forgo delivery altogether. The good news is that inflation is set to fall early in 2023.
Strike days
The inflation we all faced in 2022 also had a detrimental effect on our workforce. Many have found it difficult to keep up with the rising bills, pulling into light the inequalities in pay and worker rights across the United Kingdom. This has led to many going on strike to dispute pay disparities and workers’ rights throughout the year. This year we have seen a number of strikes which have impacted people, from the rail strikes to the Royal Mail – all of which further disrupt deliveries. In fact, the UK has lost more than half a million work days due to strikes across 2022. This causes disruption on all ends as customers and businesses alike worry about the delivery of their goods. We might see this go further into 2023, with some unions continuing into this year, such as the January rail strikes.
Transportation
Another factor which has been brought into question over 2022 is the logistics of our deliveries and storage operations. Glasgow’s COP26 in November 2021 had a large emphasis on freight and logistics, with the environmental impact of transportation methods being brought back into question. This, alongside the global efforts to reduce carbon emissions, means that logistic companies are now going to have to transition their fuel consumptions to more environmentally friendly alternatives. This can be expected to escalate as we head into 2023, with the International Energy Agency (IEA) asking for the banning of all new petrol and diesel cars by 2035. This will affect the ways in which we transport goods both at home and abroad, as more countries shift towards renewable power.
Ann Dowdeswell, Commercial Director at Jermyn Street Design says: “2022 has been a year of significant challenges for many, as the supply chain has been disrupted from all areas. Inflation has caused problems across the line for many businesses, whether SMEs or established corporations.
“The increase in demand for warehousing and increasing labour wage demands has led to rising premiums. Storage is essential for businesses who deliver tangible stock and increasing warehouse prices can be expected to cause disruptions going into the new year.”
Climate change and the weather
The supply chain deals heavily with the elements, having to be transported across countries, regions, or even the world. The current climate change crisis has led to extreme weather conditions which can have a detrimental effect on stock. Whether it is the locations of our storage containers and warehouses, or it is the transportation of assets, the supply chain is especially susceptible to these changes in weather and temperature. The dangers of rising sea levels and extreme weather conditions for businesses include damages to assets, as well as customer complaints, delayed services and temporary shutdowns. While effort is being made to reduce the impact of climate change globally, businesses should prepare for further weather conditions in 2023 and establish continuance plans in the event of blackouts or logistical problems.
Whether it is working days being disrupted by strikes or terrible weather, the supply chain faced significant issues throughout 2022. While some issues, such as inflation, may not be an issue as we continue through 2023, we can expect the weather and other factors to continue to prove a problem. This not only affects the businesses involved, but also the customer quality of service.
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Sources:
https://www.zurich.co.uk/news-and-insight/how-does-inflation-impact-the-supply-chain#:~:text=Inflation%20in%20the%20supply%20chain,materials%2C%20energy%2C%20and%20transportation.
https://www.independent.co.uk/news/uk/home-news/when-is-royal-mail-on-strike-in-december-b2240419.html
UK loses over half a million work days to strikes and unions signal more to come
https://www.weforum.org/agenda/2022/01/challenges-supply-chains-covid19-2022
IEA calls for global ban on petrol and diesel car sales by 2035
https://www.nationalrail.co.uk/service_disruptions/312764.aspx
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