Overlooking Red Flags Leads to Supply Chains Disruptions
Building a dependable global supply chain requires more than just finding a low-cost supplier. It demands a close look at potential warning signs that can easily turn into bigger problems.
If you miss these red flags, you’ll likely face supply chains disruptions that slow your business, raise costs, and add frustration for everyone from sourcing managers to e-commerce entrepreneurs. According to one study, 60% of supply chain interruptions come from delayed or unclear communication, showing how quickly small issues can balloon into larger setbacks (forthsource.io).
Whether you manage a production line in Asia or import promotional items to North America, it’s important to understand how these common red flags can create disruptions. Studies have shown that nearly every company—96% in one report—has faced some form of supplier payment fraud attempt over the past year (forthsource.io).
That means you’re hardly alone. Still, being aware of these red flags and acting on them can help you avoid damaging supply chains disruptions and build a more resilient operation.
Payment Fraud: How It Fuels Supply Chains Disruptions
Payment fraud is one of the most damaging red flags to watch out for when working with suppliers. It can range from suspicious billing errors to malicious attempts to steal money.
In many cases, you may notice invoices with odd amounts, frequent requests for changes in payment method, or a refusal to use secure payment tools. When a supplier’s payment approach doesn’t line up with industry standards, it’s time to ask questions.
Fraud doesn’t just cost your business money; it also creates major supply chains disruptions. If you can’t trust your supplier to send correct invoices or manage payment channels securely, you’ll likely run into bigger issues down the road.
Considering that 96% of businesses encountered payment fraud attempts recently (forthsource.io), the threat is widespread. Tools like Ivalua Supplier Risk Management or SAP ERP can give you better visibility into open invoices, payment terms, and even real-time risk monitoring so you can spot fraud attempts before they escalate.
More Red Flags Causing Supply Chains Disruptions
Below are four additional red flags that can wreck your business operations if you ignore them. Each sign points to underlying supplier problems that may lead to bigger emergencies in your production timeline.
- Communication Gaps
Communication is the lifeblood of any supply chain. A lack of quick updates or unclear instructions can cause missed deadlines, product reworks, or rushed shipping. Over 60% of supply chain disruptions stem from delayed or unclear communication (forthsource.io). Take note if your supplier repeatedly takes days to respond to emails or fails to confirm key details. That behavior is a serious risk.
To avoid this, use project management tools or supply chain software such as E2open. With over 60,000 trading partners in its business network (en.wikipedia.org), E2open is well-known for helping companies gain real-time coordination with suppliers, which can safeguard you against nasty surprises. - Lack of Transparency
Another telltale sign you could face supply chains disruptions is when a supplier refuses to share information about production processes, raw material sourcing, or timelines. Sometimes, it can mean something as simple as not letting you tour the factory or see relevant certifications. Other times, it might mean they’re hiding poor quality control or labor issues.
If you see a pattern of secrecy, dig deeper. Coupa, a public cloud-based spend management platform, can help you gather supplier data and verify compliance. Tools like Seerist can also provide real-time risk alerts, showing whether a supplier’s region is facing possible regulation changes or labor disputes that might affect transparency. By using these tools, you’re more likely to dodge the hidden issues that often translate into supply disruptions. - Hidden Quality Issues
Receiving samples that look fine, only to have the production batch arrive with defects, is a classic clue that your supplier might be cutting corners. Poor quality can halt your shipments and increase return rates. You might also have to pay more for quality inspections or solutions. That spells trouble for your bottom line.
Companies like Avetta help you check manufacturing standards, supplier compliance, and overall quality measures. If you’re suddenly seeing inconsistent product quality, it’s time to either investigate further or switch to a more reliable supplier. - Tariff or Regulatory Non-Compliance
With tariffs shifting unpredictably, many manufacturers are already dealing with cost hikes. According to recent data, supplier delays and cost increases reached record highs last year due to tariffs (axios.com).
If your supplier doesn’t stay current on tariff rules or fails to meet regulatory standards, you could face sudden customs holds, fines, or rising production costs. All of this ratchets up your risk for supply chains disruptions. In industries like sports apparel, manufacturers such as Sphere Sport emphasize verifying quality and compliance documents before production begins.
Tools like Veriforce offer compliance software that helps track changing regulations in various countries. You can receive alerts if your supplier is out of compliance, helping you avoid fines and shipping delays. This is especially important given that the value of intermediate goods traded internationally has tripled since 2000 (ft.com). As global trade intensifies, so does your exposure to changes in tariffs and rules.
Final Red Flags That Result in Supply Chains Disruptions
Now let’s look at the last three major supplier red flags. Even if you’ve had a smooth relationship with a supplier in the past, these signs may indicate looming trouble ahead.
- Cybersecurity Vulnerabilities
As more data and payments go digital, cybersecurity risks are becoming a major source of supply chains disruptions. Suppliers who lack a secure data infrastructure could expose your information to hackers. Tools like Bitsight can give you an overview of a supplier’s cyber risk posture, helping you see if they’re a strong digital partner.
Cyberattacks don’t just harm data—they can bring production lines to a sudden halt. If a supplier’s systems go offline, your orders might see indefinite delays. With more businesses relying on AI and connected platforms, the demand for AI in supply chains is expected to surge from $2.7 billion to $55 billion by 2029 (reuters.com). As you become more reliant on digital tools, weak cybersecurity in any link of your chain can spread disruptions across multiple points. - Inflexibility in Production
Suppliers who can’t adapt to changing schedules, new product specifications, or last-minute order adjustments are another huge red flag. Sudden spikes in product demand or unplanned shipping interruptions can happen—a truly resilient supply chain can handle these changes. On the other hand, a supplier that insists on rigid processes puts you at higher risk for supply chains disruptions.
Blue Yonder, formerly known as JDA Software, is one resource to consider. Generating $1.36 billion in revenue in 2024 (en.wikipedia.org), Blue Yonder focuses on dynamic supply chain solutions that help businesses forecast and respond to unexpected changes. If your supplier won’t bend when you need a fast pivot, it might be time to partner with someone else. - Poor Innovation Mindset
While not always top of mind, a supplier’s reluctance to adopt new methods or cutting-edge tools can hurt your competitiveness in the long run. If they’re not open to modernizing processes—like integrating advanced forecasting or using software solutions that track shipping in real time—then you may be stuck with outdated approaches. Over time, these outdated practices lead to slower deliveries or repeated stockouts.
The Descartes Systems Group, which brought in over $600 million in revenue in 2025 (en.wikipedia.org), focuses on logistics software and cloud-based services. When a supplier is hesitant to engage with such platforms, it might signal a bigger issue with their long-term planning capacities. Eventually, that lack of innovation can create roadblocks for your own growth, sparking supply chains disruptions that your competitors won’t have to deal with.
Conclusion
Successfully managing global production goes beyond just saving on costs—it’s about identifying red flags before they unleash supply chains disruptions that slow your organization down. If you experience repeated payment concerns, major communication gaps, or ongoing quality problems, those are signs you need to investigate or make a switch.
Likewise, if your supplier can’t keep up with tariffs or won’t invest in better cybersecurity measures, you could find your operations stuck in port or dealing with stolen data.
The good news is that you don’t have to face these threats alone. Tools like SAP ERP, Ivalua Supplier Risk Management, and Veriforce can help you keep tabs on supplier performance and access real-time warnings.
Leading software providers such as E2open, Coupa, and Seerist also supply analytics and improved visibility, helping you get ahead of potential fail points before they grow. By staying informed and proactive, you can steer clear of supply chains disruptions caused by unscrupulous or unprepared suppliers.
Ultimately, a healthy supplier relationship starts with knowing where trouble might lurk—and being ready to address it for the long-term health of your business.
