Supply Chain Disruptions Across Industries Fueled by Unrest in Middle East

The Gulfstream G280 jet—a preferred transportation mode for many senior corporate executives, professional athletes, and entertainers—is encountering production delays due to ongoing hostilities in the Israel-Hamas war.

General Dynamics’ G280 is experiencing supply interruptions on raw materials sourced throughout the region. The conflict in the Middle East and attacks on the Red Sea have caused shippers to consider alternative (and longer) routes than through the Suez Canal, leading to parts delays, shortages and higher costs.

In addition to the conflict’s effect on the aviation industry, other industries are seeing disruptions. Automotive producers Tesla and Volvo are both experiencing parts shortages impacting production plans. Many manufacturers are supplementing ocean shipments with air cargo which is much more expensive (although with potentially shorter transit times).

Video Spotlight:  

This post is based on the Supply Chain Dive article, General Dynamics’ aircraft production disrupted by Israel-Hamas war, by Kelly Stroh, January 30, 2024; the Gulfstream G280 webpage; and the YouTube video in the Spotlight. Funtap/Shutterstock

Discussion Questions:

1. What are some implications to consumers across all industries, with the ongoing supply disruptions in the Middle East?

Guidance: Students may have several suggestions. Some ideas include: higher prices due to supply disruptions on top of already high inflation levels, lower selection of goods available, and higher levels of defects associated with extra handling/additional touch-points through transportation channels.

2. What are some options to improve supply chain resiliency, given ongoing supply disruptions in the Middle East?

Guidance: Companies may consider reshoring their supplier base (i.e., sourcing with more domestically-located suppliers), or insourcing (i.e., making in-house) some currently outsourced processes and/or components (regardless of location).

Another option is to implement a dual-supplier solution, to the extent possible, on key parts. Have multiple suppliers in different regions with different levels of geopolitical risk (for example, supplement an existing Middle East supplier with an Asian or South American supplier).

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