Supply chain disruption is a major issue across industries. Because of the pandemic, many manufacturing companies around the world have shut down. Omicron is making matters worse. These manufacturing companies produce parts needed by other manufacturers of finished goods. Therefore, the shortage in parts affects other manufacturers, which, in turn, affects the availability of finished products for retailers to offer to consumers.
Shutdowns cause another bottleneck in the supply chain in major ports and airports worldwide due to the pandemic. Storage areas in hubs get filled up by goods and cannot receive more. There is also a lack of workers to unload shipments. Hence, incoming ships are either slowed down or diverted to other ports if there is any with room to spare. Meanwhile, companies waiting for these goods are helpless as they are stuck. Company inventories run out, and they lose sales.
Unless a company addresses these issues, revenue will suffer greatly. According to The Guardian, experts state that the crisis in the global supply chain could last for two years. Logistics Management cites results from the Accenture: C-Suite Reactions to the Supply Chain Crisis study showing that a third of business leaders think it will extend up to three years.
Developing Resilience Against Supply Chain Disruption
Companies that rely on only one major supplier are putting themselves at high risk. Businesses must now develop relationships with several suppliers to have other sources in case some get bogged down. They must also have suppliers from various geographical locations. If possible, it is best to have local suppliers. Delivery will be less of a hassle.
Be ready to have alternative products on hand to offer to customers. Some of them will be willing to try out something new if they cannot find their usual product anywhere. If your budget allows it, you can offer testers for free. This can result in future orders.
Having ample inventory is also a must these days. Consumers have gotten used to same-day deliveries and do not have the patience for long waiting times. Because consumers have access to many sources online, they can easily look for another company that has what they need on-hand, ready for delivery. To get ahead of competitors, a company must be able to advertise on its website and social media accounts that it has all products available.
Partner with a trustworthy delivery service that also offers same-day delivery for customers who want this. Ensure that the delivery service is known for handling packages with care and following all Covid-19 safety protocols.
It is best not to advertise products you do not have in stock. When a customer places an order with you, and you place an order with your supplier, you never know if the item will be delivered on the date promised. Delays will cost you, not just that client. Negative feedback on your website and social media can turn off other existing and potential customers, as well.
Warehousing Stocks
Now is the right time to have a more spacious warehouse. A warehouse can be built on top of the garage for small businesses that sell online. This will not take up space from the rest of the property. It is also easily accessible.
Get quotations from several contractors to be able to compare and get the best price. This is not necessarily the lowest price. Ask for referrals and check on these. Choose a contractor with a low price and a good reputation for work quality and finishing on schedule. Take note that there is also a shortage in construction materials and labor, driving up costs. You must factor these into your budget and schedule.
Ensure that the construction work does not damage your garage. The contractor must use tire covers that leave no marks on any wheeled equipment that will go into the garage. The garage floor must be properly covered for protection beforehand.
Maximize Technology
The latest innovations in technology can provide huge benefits for companies in managing their supply chain. Businesses must gather data on their customers’ needs and purchasing patterns. Artificial intelligence (AI) software can do this and then analyze the data to create projections. Companies can use these projections to determine the types and number of products to be stocked in the inventory. This is more cost-effective than stockpiling everything. With the latter, you can still end up with a shortage in bestsellers and a surplus of other items.
Digital technology can also link up every sale with inventory and create a notification when the inventory for a specific product reaches a certain level. This ensures that replenishments are ordered early.
By setting up the right strategies, businesses can manage supply chain disruptions. With these preparations, a company can even turn these disruptions into opportunities.