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It is fair to say that supply chain management has been more challenging in the last three years than it had been for decades before that. While everyone was optimistic at the beginning, things started looking gloomy once people realized supply chains could be disrupted for three years or more. In many ways, things are starting to look around. Businesses must be prepared for disruptions like this. Here are some ways businesses can mitigate supply chain disruptions and their effects.
Find and Fix Likely Points of Failure
Every business process has a point of failure that business owners must be aware of and should try to repair. There are many moving parts in a supply chain including suppliers, distributors, logistics and transportation firms, the business, and its customers. Any of these areas could be points of failure in the right circumstances.
It is often best to bring in an external partner to look at your supply chain even when you think you know all its ins and outs. Businesses can talk to supply chain management consulting firms like Supply Velocity who will look at and give you advice on their current supply chain. They also help businesses develop new supply chain networks and understand how flexible, resilient and agile their supply chain is and its ability to withstand disruptions.
A secondary benefit of streamlining your supply chain is making it more efficient which can save you a lot of money.
Know The Source of Your Materials
Understanding your supply chain also means understanding where your materials come from. You need to understand all the challenges inherent in that location or country including political, social, and economic challenges.
If there is a disruption in any way in the country or location where you source your materials, you will either have no raw materials to use or the raw material will get very expensive. Both affect your ability to manufacture thereby affecting the rest of your supply chain.
You can mitigate some of this risk by having a secondary source of materials that is located far from the primary source. Unless there is a massive regional or global challenge, both sources are unlikely to be disrupted simultaneously
Keep an Eye on Suppliers
If you are experiencing supply chain issues or bottlenecks, other people are likely experiencing it too. However, there is typically one business that remains unaffected. By staying close to suppliers and keeping an eye on them, you will know which ones are navigating a crisis more easily.
You can then get in touch with them and inquire if they could help your business out. Relationships like this are key in a complicated and interconnected industry such as the supply, logistics, and transportation industries.
Forecast Carefully
Forecasting can help ensure you have enough material in stock and help you navigate a disruption more easily. Numerous tools like artificial intelligence and machine learning now help businesses forecast better.Supply chain disruptions and bottlenecks can have a massive negative effect on your business. You need to know how to avoid and navigate them should they happen.
