Supply Chain Disasters-When Supply Chain Management Goes Wrong

Posted on 23rd January 2020

Supply chain management is a complex yet necessary task for any business. Get it wrong, and you can find yourself on the wrong end of adverse publicity, reputational damage and even expensive litigation. In the UK, the operating environment has been destabilised by the looming shadow of Brexit. On top of this, the good old British weather is getting more difficult to predict, creating problems for businesses across the country. With a new decade upon us, it seemed a good time to look back at some of the different supply chain disasters in the headlines over the past few years.

The Beast from the East brings unseasonably poor profits

Ocado suffered a cold snap in 2018 as the Beast from the East stormed through their profits. They reported a drop of £1.5 million due to cancelled orders and delivery problems caused by the snow and ice. However, they weathered the storm and met their quarterly target predictions despite the setback. And it was sunny weather for food banks when the company donated the food that couldn’t be delivered to them.

Lesson learnt: When the storm is from the east, it’s good for neither businesses nor beast.

Oh dear! No chicken dinner

It seems not all fast-food chicken joints have yet mastered the nuances of supply chain management. Nando’s have run out of chicken in UK restaurants on several occasions over the past few years. Back in June 2014, they weren’t playing ball when their Wimbledon branch reported they were chickenless during the All England Tennis Championships. Then, in March 2018, Peri-Peri cold weather stopped deliveries to its Croydon branch. Customers were seen flocking to neighbouring McDonald's to get their fast food fix.

The award for the most famous supply chain management disaster of the 2000s, however, has to go to KFC. In February 2018, teething problems with their new delivery contractor meant only poultry amounts of chicken was delivered to its branches. Shockingly, it forced over 90% of them to close their doors. It was a few days before they completed re-feathering their nests and returned to business as usual.

Lesson learnt: Always count your chickens before dispatch.

Under cyber attack

Not something most businesses consider a supply chain disruption, cyber-attacks are, in fact, one of the most serious issues that could hit your business. In 2017, a piece of ransomware rocked the boat of shipping giant A.P. Møller-Maersk, bringing them to a standstill and leaving them stranded in the harbour. The attack highlighted the need for businesses to shore up their procurement processes and conduct security checks on companies and their systems before entering into contracts. Any found lacking should be given a wide berth.

Lesson learnt: If your suppliers don’t know the security ropes, you may find yourself between the devil and the deep blue sea.

Avoiding supply chain disasters

If there’s one thing we can learn from the supply chain disruptions listed in this article, it’s that the Scouts are right. Companies need to ‘be prepared’ for the worst happening. Managing your supplier relationships effectively, identifying risks and having robust mitigation plans in place should be essential parts of your procurement strategy. If you’d like to learn about how the Atamis procurement solution can help you avoid supply chain disruption, contact one of our experienced team now.

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