SURVEY: Manufacturing Supply Disruptions to Last Well Into 2023

A new MLC survey warns that disruption could continue for as long as two years as manufacturers strive to adopt more resilient supply chain strategies.

Manufacturing supply chains may never be the same again. 

After more than two years of excessive supply disruption caused by an unprecedented combination of pandemic lockdowns, blocked shipping lanes, container scarcity, material and component shortages, extreme weather events, rising prices, and military conflict, fundamental shifts in supply chain approaches are now underway across the industry as manufacturers desperately seek to improve supply chain resiliency. 

And if you were hoping that those debilitating high levels of disruption were only a short-term problem, you may want to reconsider. Over half the manufacturers responding to the MLC’s latest Resilient M4.0 Supply Chain survey don’t expect the situation to improve for at least a year, or maybe two. Some don’t even think high levels of supply chain disruption will ever go away, at least for the foreseeable future. 

No wonder then, that managing the impacts of supply chain disruption now tops the action list for manufacturing leadership teams today. Supply chain organizations in every sector are urgently rethinking how manufacturing supply chains can operate more effectively and resiliently by reassessing traditional supply chain strategies, reducing network complexity, integrating key functions, redesigning processes, and harnessing the power of digital tools wherever they can to transform their supply chain ecosystems. 

Ultimately, the outcome of such moves may transform the dynamics of global manufacturing supply strategies forever. 

Universal Disruption

Manufacturing supply chains remain a predominantly global undertaking. While some companies are now supporting their operations with regional (15%) or local networks (12%), over half of companies (51%) continue to be dependant on global networks of suppliers to fuel their businesses (Chart 1). 

Yet irrespective of geographical strategies, it seems that the last few years of disruption have significantly impacted companies with all types of supply chain structures. A substantial 90% of all respondents to the survey report suffering either significant (52.5%) or partial (39%) disruption over the last two years. A mere half a percent say they have seen no impact at all (Chart 2). 

The most severe aspects of that disruption have been in raw material shortages (36%), excessive cost rises in materials and shipping (34%), and component shortages (33%). But around a quarter of companies also say they’ve had to deal with significant issues in sudden demand surges (25%) and reduced productivity (22%) due to labor shortages and equipment failures too (Chart 3). It’s that debilitating combination of factors that is now driving many companies to reassess the vulnerability of their supply chains and their exposure to sudden global and regional events. 

Survey development was led by the MLC editorial team and the MLC’s Board of Governors.