Business

Navigating global trade and supply chain challenges

Published

12 months ago

2025/04/1

An extreme weather event; a flooded Sri Lankan paddy field.

This article aims to provide a comprehensive understanding of a major challenge to the smooth flow of the supply chain, “The stockouts”, their causes and most importantly, effective strategies to prevent them.

I strongly feel this topic is quite appropriate at a time where most of the companies struggle to eliminate bottlenecks in their supply chains.

In today’s fast-paced business environment, maintaining optimal inventory levels is crucial for success. As businesses strive to meet ever-changing consumer demands, the challenge of preventing stockouts becomes increasingly complex and a robust supply chain planning process with long, medium and short term strategies are key to the success of the supply chain.

Stockouts occur when a business runs out of inventory for a particular product, leaving them unable to fulfill customer requirements.

Let us understand common causes of stockouts. Inaccurate demand forecasting is a major cause as our markets depend on a demand-driven forecast. Poor inventory management is seen in many organizations with inefficient tracking systems or human errors in inventory counts, misleading stock levels, lead time. and sales/ stock miscalculations. Such supply chain disruptions interrupt the flow of goods.

In an increasingly unpredictable world, supply chain (S.C.) disruptions are no longer an exception but the rule. Factors such as natural disasters, geopolitical tensions, extreme weather events, pandemics, labour and raw material shortages, infrastructure challenges, logistical issues, seasonal fluctuations and long lead times due to unexpected conditions and holidays in supplier country have made supply chain professionals a more complex situation. Hence, the supply chain professionals at the customer end should be very knowledgeable in respect of the above conditions when forecasting and final planning as per correct demand.

Stockouts can have far-reaching consequences that extend beyond the immediate loss of sale and revenue. Other such consequences are decreased customer satisfaction, potentially damaging long-term loyalty, reduced brand reputation as frequent stockouts erode trust in your brand and increased operational costs rushing to restock items as a preventive measure.

(Agile supply chains at a higher cost of material and shipping) and market-share loss.

By recognizing these consequences, businesses should focus on implementing robust stockout prevention strategies and investing in effective inventory management solutions.

Let us now discuss as to how we should avoid stockouts and what the key strategies are?

Maintaining accurate inventory records is fundamental to preventing stockouts. Effective inventory management strategies and tools should provide real-time visibility into stock levels. For this, advanced inventory management software systems must be utilized for automated reordering and calculating re-order points.

However, inventory professionals should obtain information (data) with specific, timely, and a very accurate manner. This is why the organizations fail today in computing the correct re-order levels/points.

What to order, when to order, and how much to order depend on the accuracy of such data. If it fails, the entire supply chain will face lots of disruptions.

Further, regular cycle counts, ABC analysis based on consumption values and, VED/SDE/HML stock analysis are vital tools to avoid stockouts and excess stocks.

VED- Vital, Essential, Desired

SDE- Scarce, Difficult to obtain, Easy to obtain as per lead times.

HML -High, Medium, Lowpriced items

I would recommend staff training, utilizing barcode systems, and streamline receiving and issuing processes too to uplift the inventory management system.

Therefore, I wish to reiterate, that accurate Inventory data forms the foundation for effective demand forecasting & inventory optimization strategies.

Determining appropriate stock levels is one of the most challenging tasks faced by inventory managers. To mitigate the risk of stock outs due to uncertainties in supply or demand, Safety stock (or buffer stock) is maintained by stock controllers, which intends to cover any shortfall in cycle stock (moving stock) during the lead time period. It is an important element of the re-order point formula.

Reorder Point (ROP) = (Average consumption × Lead time) + Safety Stock

However, the stock should be balanced between overstock and stock-out situations. There are many methods of calculating the safety stock, such as fixed safety stock, time-based safety stock, and average/max calculations.

(Max. sales × Max. lead time) – (Average sales × Average lead time) = Projected Safety Stock

There are statistical calculations as well.

The performance of the supply chain should be monitored and reviewed. Supply chain manager should “keep an eye’ on the progress on an ongoing basis and gather formal and informal control information. KPI, balance score card, bench-marking( best in class strategy) ,TQM (continuous improvement) are some of the tools to assess the performance of the organization.

Digital transformation revolutionizing inventory management practices within supply chain is offering unprecedented opportunities and challenges for business worldwide. The digital technologies significantly enhance inventory visibility, improved accuracy, advanced demand forecasting and streamlined supply chain collaboration. Despite these benefits, challenges such as system integration complexities, high implementation costs data quality management, cyber security risks and regulatory compliance issues are prevalent.

In today’s world of pandemics, geopolitical shocks and extreme weather events,

efficiency alone is a fragile strategy, The goal is no longer, just resilience, it is ANTIFRAGILITY which means getting stronger from shocks rather than just surviving them.

(The writer is an experienced lecturer and consultant on Supply Chain Management)

E mail- suveentrading@yahoo.com

By Denver Brian Coorey

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Business

Oil tops $116 a barrel as Iran accuses US of preparing invasion

Published

13 hours ago

2026/03/30

Priyan

A worker collects engine oil as he works at a degassing station in the Zubair oilfield near Basra, Iraq, on March 28, 2026 [Aljazeera]

Oil prices have surged to their highest level in nearly two weeks amid escalation on multiple fronts of the US-Israel war on Iran.

Brent crude, the global benchmark, rose more than 3 percent on Monday morning to top $116 a barrel.

The latest climb took the global benchmark to its highest point since March 19, when it briefly touched $119 a barrel.

The surge came after Iran said it was prepared for a US ground invasion, with the speaker of the country’s parliament warning that Tehran was waiting for the arrival of US troops to “set them on fire” and “punish” their regional allies.

Tehran’s warning came as the conflict deepened over the weekend, with the Iranian-backed Houthis launching missiles at Israel for the first time in the war, and Israel expanding its invasion of southern Lebanon.

Asia’s main stock indexes fell sharply in morning trading, with Japan’s Nikkei 225 and South Korea’s KOSPI both down more than 4 percent as of 1:30 GMT.

Iran’s effective closure of the Strait of Hormuz in retaliation for the US-Israel war has disrupted about one-fifth of global oil and liquified natural gas (LNG) supplies, plunging the world into its biggest energy crisis in decades.

Oil prices have risen nearly 60 percent since the start of the war, driving up fuel prices worldwide and forcing numerous countries to adopt emergency measures to conserve energy.

Analysts have warned that oil prices are likely to keep rising unless maritime traffic returns to normal levels in the strait.

US President Donald Trump has threatened to “obliterate” Iran’s energy infrastructure if Tehran does not relinquish its stranglehold on the waterway by a deadline of April 6.

Trump, who on Thursday extended his deadline by 10 days, has proposed a 15-point plan for ending the war with Iran and insisted that the two sides are making progress towards a deal in indirect talks being mediated by Pakistan.

Tehran has flatly rejected Trump’s plan and proposed its own terms for a ceasefire, including war reparations and recognition of Iran’s right to control the strait.

Greg Newman, CEO of Onyx Capital Group, which began as an oil derivatives trading house, said energy consumers were only beginning to feel the true fallout of the turmoil.

“Physical oil moves around the world in loading cycles, and Europe has taken around three weeks to really start feeling the effects of the oil shortage,” Newman told Al Jazeera.

“Brent is starting to reflect the reality, and we think it’s a steady rise from here towards $120 and beyond.”

Newman said the scale of the disruption had yet to be fully appreciated.

“No one in the market has ever seen the outages we are now suffering from – physical premiums are the highest ever. There is still a sense that the macro world is not taking this seriously enough, but it is worse than anything that has come before it,” he said.

“The reality will come out in the economic numbers over the coming months.”

While Iran has been allowing a growing number of transits by ships that are not aligned with the US or Israel, traffic remains a fraction of pre-war levels.

On Saturday, Pakistani Minister of Foreign Affairs Ishaq Dar announced that Tehran had agreed to allow 20 Pakistani-flagged vessels to pass the strait in what he described as a “meaningful step toward peace”.

Malaysian Prime Minister Anwar Ibrahim said last week that Iran had granted an unspecified number of Malaysian vessels permission to clear the strait.

Seven non-Iranian vessels passed the strait on Thursday, up from five on Wednesday and four on Tuesday, according to maritime intelligence firm Windward.

Before the start of the war on February 28, the strait saw an average of 120 daily transits, according to Windward.

[Aljazeera]

Business

SLT-MOBITEL turnaround signals new era for SOEs, says deputy minister

Published

15 hours ago

2026/03/30

Thilina Walpola

The panel discussion led by Deputy Minister of Digital Economy Eng. Eranga Weeraratne (centre) with SLT MOBITEL’s top management Pic by Nishan S. Priyantha

The era of privatising loss-making state-owned enterprises may be drawing to a close, with SLT-MOBITEL emerging as proof that strategic management can deliver profitability without a change in ownership, Deputy Minister of Digital Economy Eng. Eranga Weeraratne said.

“There was a massive public outcry asking the previous governments to sell the loss-making state-owned enterprises. Now it is not there as it was used to be heard,” Weeraratne said. “SLT-MOBITEL has proven that the proper management strategy can turn any loss-making SOE into profit. Gone are the days we heard ‘sell, sell, sell’.”

The remarks came as Sri Lanka’s national ICT provider reported a decisive financial turnaround in FY 2025, driven by disciplined cost management, operational efficiency, and steady growth across fixed and mobile businesses.

The company has simultaneously rolled out a pioneering 24/7 operational model – the industry’s first – with 14 Outside Plant Maintenance Centres operating round-the-clock in metro areas, Kandy, and Jaffna to ensure uninterrupted connectivity.

“Our strong financial results reflect the resilience of SLT-MOBITEL and the trust customers place in us,” said Dr. Mothilal de Silva, Chairman, SLT Group. “With the roll-out of the 24/7 OPMC operations, we are raising the bar for service reliability.”

SLT-MOBITEL has also made 5G publicly available in Sri Lanka and continues to support the Ministry of Digital Economy with secure data centre infrastructure, reinforcing its role as a catalyst of national development.

By Sanath Nanayakkare

Business

Kia Tasman arrives in Sri Lanka: A pickup built for work and comfort

Published

15 hours ago

2026/03/30

Thilina Walpola

Kia Motors Lanka has launched the all-new Kia Tasman, the brand’s first-ever pickup truck – engineered to redefine the double cab segment by combining rugged capability with SUV-like refinement.

Built on a robust body-on-frame platform, the Tasman offers best-in-class strength with a payload capacity of 1,151kg, towing up to 3,500kg, and water wading up to 800mm. Advanced 4WD systems and terrain modes ensure unmatched off-road performance.

Inside, the cabin surprises with best-in-class rear legroom, sliding and reclining rear seats – a segment-first – and a panoramic display with premium Harman Kardon sound.

“This is a vehicle conceived without compromise,” said Kia Motors Lanka Chairman Mahen Thambiah. “For customers who demand durability, capability, and everyday comfort, the Tasman delivers on every front.”