The Global Supply Chain and the Motoring Industry

At Simply Brands, all our brands rely heavily on the global supply chain running efficiently and effectively. Our Simply Auto range is the biggest in our offering and so this area in particular is one in which we need to maintain an astute level of insight into the news, current affairs and state of the economy the world over to appreciate how the global supply chain could be affected.

The global supply chain is like a web that connects every element in a production and sales cycle together. From collecting and converting raw materials to production, warehousing, packaging, distribution and sales, everything needs to work in sync for a smooth process and ultimately, consumer satisfaction. A break in this web, a delay or even a slight issue can have a large impact further down the line, whether that’s issues with supply and demand for the consumer or financial implications for those involved in the production process.

Over the last few years, the global supply chain hasn’t seen just small changes and disruption, there have been catastrophic issues that have had both immediate impact and implications that could take years to recover from.

Brexit

Due to the changes in visa applications for EU nationals, many manufacturing and haulage companies are finding it difficult to hire new staff to keep up with demand. This is causing delays with both developing products and shipping them out to retailers and stockists.

Energy

The energy crisis is something that’s affecting everyone, not just businesses. However, with the price rises taking such a shocking and worrying increase (with more set to happen), businesses are feeling the financial strain, causing delays in production and distribution as finances are funnelled into energy before anything else.

Covid-19

We may be over the worst of the Covid-19 pandemic and daily life is somewhat back to normal, but the after-effects for business will be felt for a long time yet. Many workers left the UK and have not returned which has meant a lack of skilled workers for many businesses. Finding, hiring and training new staff takes time which causes delays before the backlog can even be addressed.

Ukraine

The situation in Ukraine is a concerning one for everyone and affects individuals and businesses no matter where they are in the world. The cost of materials, digital services and energy are continuing to rise and it doesn’t seem likely to settle any time soon.

Shipping

Because of so many of the factors above, shipping costs are now also on the rise. The average cost of shipping containers has quadrupled in the space of a year or two, making it even more difficult for businesses to transport their goods.

Overall, the main issues faced by the global supply chain right now are surrounding finances. The increased cost of everything from raw materials to workers to carry out the work involved makes it difficult for every part of the supply chain to operate efficiently; not to mention turn a profit. As the motoring industry relies so heavily on every part of the supply chain, we’re naturally seeing a slowdown in production.

Did you know that an average vehicle needs 30,000 components? That’s a lot of parts to build it, and they can often come from different manufacturers in different parts of the world. Add to that, the shortage of semiconductor chips, which many hybrid vehicles rely on heavily, and there is now a lengthy wait for a new vehicle as fewer new cars are coming off the production line.

So, where do we go from here? It can be difficult to see a way out of the current situation right now with so much global uncertainty and unrest in many areas. However, as businesses have navigated a global pandemic in recent years, it’s easy to see that where there is a will, there’s a way. Businesses are becoming more savvy, more efficient, more cost-effective and in the long run, the global supply chain will become even stronger. Better business relationships, more solid connections and more reliable sources will be found as everyone seeks to keep business moving, keep consumers spending and keep the global supply chain in action.