Businesses that rely on a sleek and effective supply chain know how damaging a supply chain disruption can be. Supply chains are fragile ecosystems where one broken link can have a ripple effect throughout the entire chain.
Although every business hopes their supply chains will be reliable and resilient, that’s only sometimes the case. It’s not a question of if, but rather when and often; there is a limit on how much one can do to mitigate it.
Supply chain disruption is an uncomfortable thing to think about. Once the disruption hits, the challenge becomes upholding your priorities. However, certain tactics and supply chain risk management tools can help secure your supply chain. Here are nine strategies you can add to minimize supply chain disruptions.
Partner With A Logistics Expert
Working with a reliable supply chain professional is a great way to ensure you get support throughout supply chain disruptions. Your partner can step in when needed to help you mitigate particular parts of your supply chain. They can also help you keep track of several components of your organization.
Create A Supply Chain Emergency Plan
Supply chain disruptions are unavoidable. An excellent example was the COVID-19 pandemic when the world experienced delays and disruptions. Setting an emergency plan is vital to prevent further supply chain disruptions.
With this strategy in place, you can prepare your company to deliver since you have the contingencies to do so. You can start by reviewing every stage of your supply chain and asking yourself what you can do when a particular stage has disruptions.
Conduct A Risk Supply Chain Audit
Performing a risk analysis of the supply chain enables you to identify weak links in your supply chain. This process will help you avoid further disruptions and discover alternatives to whatever negatively affects the supply chain.
The first thing to consider is how important each point of the supply chain is to you. When auditing the supply chain vulnerability, you must consider the high-risk points. You can then create safety nets to protect these high-risk points.
Diversify Suppliers And Manufacturers
Another important part when preparing for supply chain disruption is having backup suppliers and diversifying your supplier base. Compile a list of order fulfilment companies and suppliers for every supply chain point for the different services and products you need.
With a list of suppliers, you’ll have multiple to work with should something go amiss with your primary supplier. Having a diverse supplier or manufacturer base in various locations will ensure you have enough supplies and the right people to fix any issues that may arise.
Build Up Your Inventory
You can stock up on extra quantities of goods to help your business to survive in case of any future supply chain disruptions. These could be raw materials, components, parts, or finished products. Have a plan of what goods to stockpile and how much you need at any given time.
The best time to increase the inventory is when your business expands or launches a new product. Building up your inventory is an added expense, so check your books first and see if your revenue can handle this growth.
Improve The Transparency Of Your Supply Chain
Supply chain visibility or transparency is not easy to achieve, but it is vital to managing supply chain disruption. Transparency is how accessible and easy the organizations and processes in the supply chain are to assess and view.
Although you might know your suppliers well, you may need to learn about their distributors or suppliers. If this is the case, your supply chain needs to be transparent.
Include Partners In Risk Planning
Include partners and suppliers in planning how to mitigate supply chain disruptions. They may provide unique insights into the risks you face in your supply chain and help create effective solutions.
You must also ensure that your suppliers’ business continuity and risk management strategies align with yours. Including your partners throughout the risk management process keeps all parties on the same page and know the risks and the control measures you must implement.
Review Supply Chain Risks Periodically
The risk management strategies you put in place can only be effective if they are up-to-date and relevant to your business operations and supply chain. Carrying out risk assessment once won’t cut it. You must regularly review supply chain risks to ensure that planned responses and control measures for different scenarios are still relevant.
Supply chain disruptions are inevitable, but they don’t have to mean it is the end of your business. Following the steps mentioned above to mitigate the risks, you can respond quickly and decisively to disruptions.
This way, you can build a stronger and more resilient supply chain for your business. You’ll continue to learn from supply chain disruptions and apply new techniques to your supply chain management to foster flexibility.