When we talk about the manufacturing and distribution supply chain, we mean raw materials and finished goods that travel back and forth for thousands of miles before arriving at their final stop. These trips include a complex mix of trucks, trains, container ships and storage facilities plus countless touches by humans and computers. In this overview, we will look at the supply chain obstacles facing mid-market manufacturing and distribution companies and what businesses like yours can do about them.
1. Pricing is at the center of everything.
When it comes to understanding your supply chain risks, everything eventually points back to pricing and cash flow. Supply chain costs can show up in many direct and indirect forms:
- Raw material costs including seasonal price changes
- Fuel costs
- Warehousing costs
- Packaging costs
- Changes in the terms and conditions of sourcing contracts
- New or changing taxes at the destination or point of origin
- Labor costs for factory, handling, or transportation workers and premiums for labor shortages
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