Supply chain snags cited as bankruptcy filings pile up
"Supply chain disruptions have a way of amplifying those issues, but they are seldom the only cause of it — unless something catastrophic happens, such as the loss of a critical supplier and the inability to find an alternative," Rudi Leuschner, associate professor of supply chain management at Rutgers University, said in an interview.
…
Supply chain effects take time to show up on balance sheets and many companies have tried to use the legal system to resolve debt issues years after the pandemic-era supply shocks. The bullwhip effect, which describes small fluctuations in demand at the consumer level causing larger demand swings upstream in the supply chain, is one of the reasons for the trend, said Leuschner. Some businesses were also caught out while expanding and ended up with excess capacity after demand normalized as the pandemic receded.
…
"A disruption that lasts a couple of weeks is unlikely to be a huge source of bankruptcies by itself," said Leuschner. "But all of these factors taken together could push it over the edge."