There are few things more satisfying to a business than having plenty of orders coming in and shipping out. Every order that goes out represents increased revenue. But all it takes is one unexpected event to clog up the supply lines and all that motion halts. The world experienced this firsthand when COVID-19 hit back in 2020.
Companies who had more resilient supply chains weathered the storm much better than those caught unprepared. Supply chain problems don’t have to be as global, or as extreme, as the COVID-19 shutdowns were to have profoundly negative effects on a given business. Working on supply chain resilience is the best way to prepare your business for the next disruption, no matter how large it may be.
What is Supply Chain Resilience?
Supply chain threats can come from anywhere. Natural disasters can cut important transportation hubs off from the rest of the world. Trade disputes can increase prices or slow down movement altogether. Cybersecurity threats, economic instability, and, of course, pandemics, are just a few of the additional problems that can disrupt a supply chain.
Supply chain resilience is the ability for a company to quickly adapt to any of these disruptions with as minimal an impact on business operations as possible. Building a resilient supply chain is more than looking at what went wrong during the last disruption and fixing that. Instead, a resilient supply chain will have a plan in place for any eventuality.
6 Ways to Improve Supply Chain Resilience
Because of the number of things that can go wrong, building a resilient supply chain can seem like a daunting task. How can anyone business hope to anticipate, and plan for every disruption to their supply chain? Thankfully, there are a few steps any business can take to provide a default layer of resilience in their supply chain. Rather than hoping we never have another major supply chain disruption, follow the tips below to create a preparedness plan for when it does.
1. Spread out Your Inventory
The adage about not putting all your eggs in one basket applies to your inventory as well. Whenever possible, try to spread your inventory out across multiple locations. Everything from broken equipment to severe weather events can make it difficult to quickly access items in a warehouse. By having multiple locations to draw from, such disruptions are much less likely to occur.
A good inventory management system should be put into place. The ability to quickly find the supplies that you need across multiple locations and manage demand for all your warehouses is vital for proper supply chain visibility and for avoiding disruptions caused by inventory issues.
2. Work More Closely with Suppliers
Poor communication with suppliers decreases supply chain visibility and opens your business up to delays that could have been prepared for. In addition to using software that allows you to track supplier performance and react according to up-to-the-minute data, you should stay in close communication with suppliers. By forging relationships with suppliers, you can keep each other aware of problems which may impact shipping and share solutions to those problems.
3. Work with Multiple Suppliers
Many businesses have a favorite supplier that they’re loyal to. While we just went over the importance of forging a strong relationship with suppliers, limiting that relationship to a smaller number of them increases the chance of disruption. Move supply chain disruptions don’t happen on a global scale like the COVID-19 pandemic did. Often, what causes delays with one supplier will not have as profound an effect on another. Sourcing your materials from a diverse group of suppliers, located in diverse regions, will minimize the impact when one experiences delays.
4. Add More Carriers
This tip is like adding more suppliers and relies on the same logic. You’ve likely noticed that if you order something from a large online retailer, the carrier that brings your package will differ from order to order. This helps ensure there’s a backup carrier should something go wrong with the primary choice.
But that’s not the only benefit of using multiple carriers. Shipping carriers have differing rates and policies for differing conditions. By working with multiple carriers, you can pick the one that will have the most favorable rates for each individual order.
Check out our top Microsoft Business Central tips!
5. Be Mindful of the Data
The computing power to process substantial amounts of data has improved significantly. Businesses no longer need to rely on intuition and back of the envelope calculations to provide supply chain forecasting. By using the proper tools, you’ll be able to increase the efficiency of your operation, so sudden surges in demand don’t leave you needing supplies that haven’t arrived yet.
A good data analysis will also give you deeper insights into your inventory management, allowing you to identify the causes of shortages and overstocks, preventing them from adding inefficiency to your supply chain. Artificial intelligence and machine-learning algorithms can even monitor local and global conditions to give you a heads up about potential disruptions.
6. Increase Transparency
There are some problems with your supply chain that simply can’t be avoided. But that doesn’t mean the damage caused to your business’s reputation can’t be mitigated with a more transparent supply chain. Customers today expect to be kept in the loop about the pending arrival of their package. Modern technology allows you to eliminate data silos, reduce bottlenecks, and improve supply chain visibility.
Informing the customer when a problem is detected that may impact the arrival of their product will prevent them from growing frustrated as they wait for a shipment notification that doesn’t come. Building this level of transparency has the side effect of making your whole operation more efficient and further reducing the problems caused by disruptions.
Conclusion
StockIQ has a complete platform for intelligent supply chain planning. Our tools will provide you with the resources you need to stay on top of evolving situations and efficiently plan all aspects of your supply chain. If you want to learn more about how we can help your supply chain become more resilient, or want to see a demo of our product in action, contact us today.
