Fatihah Ramzi, DigitalCFO Asia | 21 January 2022
To efficiently handle supply chain disruptions, you must be able to respond quickly when adversity strikes your business. Here are few key steps you can take.
Disruption is a “disturbance or problems that interrupt an event, activity, or process,” according to the dictionary. A supply chain disruption is defined as a breakdown in the movement of goods from the factory to the consumer. Global supply chains have been disrupted by the unprecedented COVID-19 pandemic. Because of the large number of individuals, countries, and worldwide businesses impacted, the repercussions of global pandemics or other public health catastrophes can disrupt routine operations at every phase of the manufacturing line. To efficiently handle supply chain disruptions, you must be able to respond quickly when adversity strikes your business. Here are few key steps you can take.
Quickly Assess Critical Events
Make a list of prospective events and determine what you will need to keep working in the future, as well as the source of their supply. It’s crucial to start looking for alternate sources for vital parts and goods. The quickest method to assess possible dangers to your supply chain is to employ technology. You can experiment with AI-enabled mapping and environmental analysis tools, as well as aggregate applications that provide geopolitical overviews and cyber threat evaluation systems. Even social media can be utilized to anticipate shortages and interruptions.
Identify Your Vulnerabilities
Supply chain threats are unavoidable, and it’s simply a matter of when, not if, your company will be impacted. As a result, the very first step is to evaluate your company to determine where it is susceptible to supply chain disruptions. Take some time to conduct a risk analysis to determine where your supply chains’ most vulnerable points are. Consider your suppliers, warehouses, and delivery routes as you assess each phase in the supply chain process. This will allow you to concentrate on the areas where you need to identify alternatives.
You may learn more about your supply chain by doing supplier mapping. Make a list of each plant site and what transpires there. This will assist you in identifying areas of weakness and generating alternate solutions. Assessing potential environmental, social, and political variables that may affect your supply chains can also be beneficial.
Build Multiple Vendor Relationships
It is a good idea to form ties with several merchants rather than just one. It is similar to diversifying your sources of income in that if one vendor relationship fails, you will have other vendors to fall back on. Diversifying your business can help you preserve supply lines and secure your customer relationships. Start negotiating with supplementary suppliers if you only work with one provider. Your company will be more resistant to upheaval if it obtains products from numerous sources.
Have Communication Policies In Place
Having clear communication policies in place is also a wise decision. Keep in touch with supply chain management so you can predict impending interruptions and place orders to compensate. Your vendors may be able to alert you to supply chain interruptions in several circumstances. The more notice you have, the faster you will be able to make decisions on whether to order more products or to start limiting your existing supplies. Additionally, try communicating with your stakeholders and consumers in a clear and concise manner. They need to know right away if there are supply chain issues and what you are doing to address them. Transparency is always preferable to concealing the reality of a supply chain issue.
Build Up Extra Supplies Over Time
You can also safeguard your company from a supply chain disruption by storing up on essential supplies over time. Stocking up will require additional storage space, but it will pay off in the long run. Your firm may be able to get through several months of disruption if you have a stockpile of vital items. It is critical to have enough finished items, components, or even raw materials on hand to keep your business running if your supply chains are momentarily disrupted.
Partner With A Logistics Expert
Find a fulfillment and supply chain professional who can assist you in the event of a problem. They should be able to point you in the direction of alternative courier services and explain how to deal with delays and costs and surcharges. Enterprises that provide worldwide logistical support through their own platform will be able to link directly with e-commerce companies, assisting businesses in managing customer expectations amid disruptions.
When it comes to controlling your supply chains, it is often said that the best offensive is a good defense. With the methods outlined above, you will be confident in your ability to deal with supply chain disruptions.