Companies in all sectors of the supply chain are reducing orders for goods to reduce the amount of stock they have in their inventories, a Financial Times report has explained.
The report highlights that companies of all sorts have begun to reduce their inventories, at the potential cost of other companies in the supply chain.
Feike Sijbesma, chief executive of Dutch life sciences group DSM, told the newspaper: "Some smaller companies might fail."
The phenomenon demonstrates how important supply chain management is to any organisation, as many problems affecting a company's supply chain will be external.
If companies continue to destock it could lead to a drought of orders, causing some companies in the supply chain to go out of business through a lack of work.
A business could insulate itself from the effects of such a phenomenon by employing a supply chain management company, which can act as a third-party management consultant to find ways to build the most robust supply chain available to a business.
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