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Supply Chain Disruption in International Business
Cause of the Supply Chain Disruption
The disruption in the supply chain may bring many undesirable consequences for the business. There are numerous causes of disruptions in the supply chains. They include lack of efficient communication between manufacturers and suppliers, suppliers opportunism, truck drivers and port workers strikes, inability to adjust to the new technological advances, industrial accidents, natural disasters or acts of terrorism; problems with quality; operational problems; governmental regulations. In addition to all the causes of the supply chain disruptions mentioned above, one of the primary reasons why such disruptions occur is the poor implementation of risk management for the supply chain.
Consumer Impact
The relationship between supply chain management and the company significantly impacts customer service in every respect. The quality of this service can only be achieved by well managing the chain elements in a way that guarantees customer satisfaction. As a result, supply chain disruptions change the nature of consumer-supplier relationships. Consumer prices are affected by supply chain disruptions, especially in the automotive industry (Helper & Soltas, 2021). The quality of customer service suffers from these changes in prices. Thus, supply chain disruptions may affect relationships between suppliers and consumers.
Reliance on Foreign Supplies
The United States is increasingly relying on excessively wide and unstable supply chains as a result of its over-reliance on imports. There are a variety of causes for this over-reliance on imported goods. Free trade agreements, many of which were drafted at the request of multinational firms in the United States, have driven companies to relocate production to low-wage nations like Mexico, China, and, more recently, Vietnam over the past three decades. Recognizing the gravity of the situation, lowering the pricing of American-made items is the most practical method to increase demand.
Effects on International Business
Supply chain disruptions are negatively affecting international businesses, and it could be seen from the situation with the pandemic. Supply chain disruption is inflating prices and delays for the international businesses that transfer their goods around the world (Dresner et al., 2021). In addition, many international companies that do not have fully vaccinated employees were forced to experience shortages of workers. There are different cases when international companies struggled because of the supply chain disruptions caused primarily because of the pandemic. Since international business is fully dependent on the exchange of not only services but goods, the supply chain delivery and its consequences, such as delivery delays and worsening of the relationships between supplier and consumer, will propose challenges for maintaining the stable growth of the business revenue.
Economic Condition of the United States
I think that such disruptions, on the one hand, bring threats to the economy of the United States. According to the Federal Trade Commission, supply chain disruptions can adversely affect competition in the US economy while causing serious and lasting pain to consumers (Tyko, 2021). On the other hand, the situation is giving new opportunities for the US to improve domestic manufacturing. When the economy of the state is extensively dependent on foreign companies, it creates a risk in terms of supply chain management. Because in cases of various disruptions, the supply chain will need some amount of time in order to find new suppliers. The time wasted searching for new suppliers will lead to financial losses. As a result, the GDP is at risk of decreasing because of supply chain disruption.
References
Dresner, M., Elrod, N., & Bartow, T. (2021). CBS Baltimore: Supply Chain Issues: There Really are Problems Everywhere, Even for Small Companies. Web.
Helper, S., & Soltas, E. (2021). The White House: Why the Pandemic has Disrupted Supply Chains. Web.
Tyko, K. (2021). USA Today: FTC orders Walmart, Amazon, Kroger and more to turn over Information on empty shelves, high prices. Web.
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