Most Americans have only recently become aware of exactly how delicate supply chains are. However, business owners have known since well before the pandemic that a single broken link can cause a major disruption in their supply chain.
There’s no way to prevent 100% of all supply chain disruptions. Things like natural disasters, machine breakdowns, product quality issues, and unexpected surges in demand can’t be avoided. That said, there are plenty of ways to minimize their impact and reduce a business’s vulnerability.
1. Partner With a Supply Chain Management Expert
Working with a third-party logistics and fulfillment expert is the best way to minimize supply chain disruptions. These experts can help business owners locate alternative couriers and come up with solutions to deal with unavoidable disruptions.
Logistics experts do more than just keep track of supply chain management. They also source, maintain, configure, and ship orders, update inventory, maintain stock, invoice customers, and, most importantly, issue changes when unexpected trouble arises. Finding the right logistics company takes all the stress out of order fulfillment.
2. Perform a Risk Analysis
Those who are insistent on handling order fulfillment by themselves should focus on identifying weak links in the supply chain. Some types of supply chain disruptions can’t be avoided, such as natural disasters and labor shortages from global pandemics. Others can be planned for if business owners learn how to recognize them in advance.
Identifying weak links in the supply chain helps business owners focus on finding those alternative products, suppliers, or carriers that they’re most likely to call upon for help. Don’t forget to consider factors like cybersecurity risks and problems that could come up at the warehouse. In-house risks are the easiest ones to plan for.
3. Develop an Emergency Plan
Having a contingency plan is always important. Use the information gathered during the risk analysis to develop a plan for how to overcome potentially disruptive scenarios. Business owners may not be able to eliminate the impact of supply chain disruptions, but they can minimize it.
Don’t just stop at developing a plan. Put aside money to carry it out. There’s nothing worse than being confronted with a sudden emergency and finding that there’s no way to overcome it without driving the company into debt.
4. Find Backup Suppliers
Social, political, and environmental conditions can change seemingly at the drop of a hat, and these factors can all influence supply chains. The result? International suppliers often get left in the lurch.
The best way to deal with problems affecting international manufacturing and delivery is to diversify suppliers and carriers. Identify alternative companies that can step in should current suppliers be unable to fulfill their orders. In most cases, it’s best to seek out backup suppliers and carriers from different parts of the world that are less likely to be impacted by the same disruptive events.
5. Reserve Some Inventory
Maintaining a slightly higher-than-necessary stock of all essential inventory can provide a buffer against future disruptions. Try to stockpile enough supplies to see the business through multiple months of disruption, whether that means storing parts and raw materials or finished goods.
This strategy may seem counterintuitive to business owners on strict budgets. They’re often hesitant to pay for extra warehouse space. Just keep in mind that there’s no way to predict when disruptions to global supply chains will occur, and the best-prepared companies will be in an ideal position to continue providing essential consumer goods.
6. Ensure End-to-End Visibility
The majority of business owners dealing with sudden supply chain disruptions don’t have the visibility required to develop and implement simple, effective solutions. Taking a wait-and-see approach is a huge mistake.
Business owners need to have a thorough understanding of each stage in the supply chain, from base materials to completed products, shipping carriers, and more, to plan effectively. Only work with suppliers and carriers who are willing to provide full, end-to-end visibility.
7. Maintain Open Lines of Communication
Keeping everyone on the same page during a crisis can make a huge difference. If supply chain disruptions are creating the need to reprioritize in-house operations, tell the employees. If the distribution team will be rerouted, make the whole fleet aware of the new plan.
From factory floors to customer service teams, everyone should know what’s going on during a crisis, and each employee should know how it will affect his or her job. That way, all hands will be on deck to help.
8. Prioritize Customer Satisfaction
In an ideal situation, not a single customer will notice the supply chain disruption. If they do, though, retailers should extend the open line of communication discussed above to those customers who have been most affected.
Today’s consumers expect transparency. Never try to hide disruptions from customers who will be directly impacted by them. Instead, try to soften the blow by offering payment compensation or other perks.
9. Document Response Procedures
Whether a company has just performed a risk assessment or has been affected by a real-world disruption, it’s important to document the response. Make appropriate changes to the emergency plan and keep track of what happened for future reference.
All companies should prioritize risk management, not just before supply chain disruptions occur, but also during and after the events. Those that do so will be in a better position when it comes to maintaining their bottom lines and improving consumer trust in the brand.
10. Take Advantage of Modern Technology
Modern technology like artificial intelligence (AI) can be incredibly helpful in identifying potential risks. Companies like Your Logistics take advantage of all available solutions, including computerized maintenance management software (CMMS) and AI to forecast clients’ needs under different scenarios. They use these advanced technologies to forecast needs, implement backup plans, and optimize cost, inventory, and delivery times.
The Bottom Line
There’s no way for any single business owner to control every step of the supply chain. Business owners shouldn’t just give up and accept that they could become sitting ducks at any moment, though. Instead, they should identify risks and come up with contingency plans with the help of a qualified logistics and fulfillment partner.
