Global shocks, local insanities: the two ways supply chains fail

Supply chains falter on two stages. One is vast and cinematic - the ports of Shenzhen, the container lanes, the embargoes and sanctions that redraw maps of commerce overnight. The other is humble, hidden - the storeroom, the cupboard, the quiet corner where inefficiency piles up like dust.

Both are dangerous. One strikes with thunderclaps, the other with whispers. To endure, both must be seen.

I first understood this in 2001. The crash had stripped the shine from the markets, and companies everywhere were in survival mode - paring down, recalibrating, desperate to stretch every euro. As a junior consultant, I was sent through the back corridors of spending, tasked with finding what could be saved.

There, tucked away in warehouses, I found it: corporate gifts and giveaways. Each year a new “collection” was launched, and each year the old one was quietly forgotten. The result was shelves heavy with branded trinkets no one wanted, tying up capital, gathering dust. And beyond the shelves stood a small family-run supplier, sixty percent of its income shackled to our orders.

No one meant harm. There was no malice in it. Only habit. And habit, indulged too long, becomes waste.

The fix was merciless, but survival always is. A flash sale cleared what could be moved; the rest was written off. Then came the re-tender. Larger suppliers arrived with prices our incumbent could not match. Their scale was global, their sourcing already locked into Shenzhen and beyond.

I remember the MD of that family business sitting across from me, tears in his eyes as I laid out the prices he would need to meet to survive. He knew, and I knew, that he couldn’t. It was not a negotiation, it was an unravelling. The human cost of efficiency, written on a man’s face.

In the end, the catalogue was consolidated, the new vendor took on the inventory risk, and costs dropped by half. Almost a million euros surfaced, along with a stream of recurring savings.

And so the lesson: supply-chain failure is not only the geopolitical drama of ports and tariffs. It is also the slow accumulation of small insanities inside the organisation, coupled with the human lives bound up in those contracts. The global shock kills suddenly. The local indulgence drains you slowly. And sometimes, the local story turns out to be global too - because even the giveaways in your storeroom trace back to Shenzhen.

Global shocks seize the headlines. Local insanities drain the cash. True resilience demands both: a clean house and guarded borders.