The global market is an extremely complex system and companies that operate in it are using increasingly more detailed distribution chains, with an increasing number of suppliers, who in turn rely on other suppliers, and so on. The transport of goods has seen exponential growth over the last 30 years, and increasingly intricate management systems mean that less and less goods are kept in warehouses as inventory.
By analysing a distribution chain, we can identify five aspects to consider:
- Raw materials and product components.
- The suppliers that produce these components.
- The geographical location of these suppliers.
- The flow of goods, information and money.
- Inventories and stocks of goods that are present in the chain at any given time.
If, on the one hand, this complexity allows us to reduce cost and management times, on the other, it creates extremely delicate balances that are not always easy to maintain. However, a company rarely knows its own distribution chain inside out, and therefore is at risk of having to deal with serious consequences; a snag at any point in the chain risks creating a domino effect, with global repercussions.
The possible problems are numerous, from unexpected breakdowns of machinery to natural disasters, to acts of sabotage or even terrorism. It is not enough to adopt strict risk prevention protocols, because the origin of the glitch is often external, and so obscure, that it is literally impossible to predict.
