Managing Supply Chain Issues: 5 Ways Business Owners Can Adapt
From manufacturers to retailers to consumers, everybody is feeling the strain of global supply chain issues. And, if you’re running a business that relies on products and services currently impacted by this disruption, it’s important to find solutions that help keep your shelves stocked and your operations running smoothly.
Individual businesses exert very little control over the supply chain, and often exist at its whim. What they can control, however, is how they adapt to current issues—and how they prepare themselves for future ones.
With that in mind, here’s what all business owners need to know about today’s supply chain challenges, including actionable solutions for keeping customers happy and some tips for mitigating damages for any future disruptions.
What’s causing supply chain issues?
As is usually the case, there is no single cause to blame for today’s supply chain disturbances.
The global supply chain is a highly sensitive, interconnected trade system that relies on many separate, dynamic components working together at the right time. Due to its inherent nature, when a single link on this long chain breaks, the integrity of the other components become vulnerable.
The 2020 global pandemic was a source of such a breakage, causing thousands of rippling supply disruptions throughout markets in China, Southeast Asia, and eventually, the world. Mines and factories closed, ports were shut down, and workers were laid off until quarantine procedures could run their courses.
Now, combine an ongoing pandemic with an overtaxed transportation industry, an anxiety-driving conflict in Ukraine, and rising inflation throughout U.S. markets, it’s easy to see how the chain has quickly fallen apart.
When the system fails, supply shortages begin cropping up. Demand for scarce materials like steel, lumber, copper, and aluminum causes a dramatic upward shift in prices. And, whether you’re operating within the consumer retail space or the B2B commercial sector, you’re almost certainly feeling the negative effects this sort of market environment creates.
5 ways to manage your supply chain challenges
Running a business can be a challenge at the best of times, especially when you’re dealing with widespread supply issues that are outside of your control. Your job as a business owner is to find ways to work around current issues, developing and implementing creative solutions that help bridge the gap and keep things moving along.
If you haven’t already, now is the time to plan out your next steps, keeping in mind that not only is the supply chain crisis not expected to resolve soon, but it may actually get a lot worse before it gets better. Here are five things you can (and should) do to adapt your operations and reduce at least some of the impact of supply chain issues.
1. Identify viable alternatives
If you’ve got some flexibility in your inventory, take advantage of it by sourcing alternate—and available—products when necessary. Even if it’s not your preferred choice, an alternate product could fit your needs until you can get your hands on what you really want. It also gives you an opportunity to build connections with new suppliers, which could lead to some long-term benefits.
2. Automate your chain
Supply chain issues are hard enough without having to guess what’s where and when it’s going to arrive. Automating your business’s supply-related processes and reports means that you’re never left wondering what’s on the floor, what’s in transport, and what’s not going to be available for a while. It also gives you more information that you can use as you plan ahead and keep your customers informed. Speaking of which…
3. Let your customers know what’s going on
Your customers might be disappointed to learn that a certain item they are looking for isn’t in stock and might not be for some time, but transparency is always the way to go when managing broken links in the supply chain. Be upfront about delivery expectations, and—circling back to tip number one—try to have alternate products on hand that you can offer instead.More articles from AllBusiness.com:
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4. Avoid empty shelves
You can’t stock products that you don’t have, but empty shelves send the wrong signal to your customers and can make the problem seem even worse than it is. If you have noticeable gaps in inventory, rearrange the floor to keep your store looking full and send the right visual message to people who come in.
5. Keep your entire team on the same page
It’s essential that your team has all relevant information related to product availability and that they’re able to accurately pass this information onto your customers. Ideally, you’ll want to designate one person to take the lead on supply chain management, which will include monitoring and compiling reports from your automated logistics platform. This person can then be in charge of disseminating need-to-know information and ensuring everyone stays up to date.
Preparing for future supply chain disruptions
When it comes to future supply chain issues, the question isn’t if, it’s when. So as you continue to navigate today’s issues, put into place some protocols that will help you get ahead of any issues that may come tomorrow. Many of the things you can do to mitigate future problems are also good for day-to-day operations, and will help you ensure that you’re not taken completely by surprise later on.
Here’s where to start:
Prioritize forecasting. You can’t always predict when breakdowns in the supply chain are about to occur. That being said, you can keep an eye on current trends and patterns so that you can identify issues at their earliest stages and act accordingly. When choosing an automated logistics tool, look for one that gives you a big-picture view of things like general pricing and shipping trends, so you’re at least somewhat prepared.
Buy extra. If it’s in the budget and you’ve got room to store it, overbuy high-demand inventory so that you’re not out of luck when that disruptions happen. This can eliminate a lot of the stress that comes with being completely reliant on outside forces, and it also means that you’ve got a competitive edge when stock is low everywhere else.
Diversify your inventory. The less dependent you are on one single product, the better you’ll be able to pivot if it becomes unavailable. Just as you should look for alternate products and suppliers when disruptions happen, you should also be actively on the search when things are going well. Depending on your industry, you may want to diversify manufacturers too and look for providers who can keep you stocked when others can’t.