Interruption in the supply chain is not uncommon. Natural disasters and other factors have always interfered with procurement. However, the COVID-19 pandemic fueled the disruption and caused a global supply chain crisis.
As a supply chain manager, you probably felt the burn when you had to wait a few more weeks for the essential manufacturing materials to come in.
However, you can learn some lessons on risk management from the supply chain crisis. Here is a look at some strategies you can implement today to minimize supply chain disruption.
Diversify Your Supply Chain
Avoid depending on a single source or country for all your raw materials. Remember that a problem at a single source will disrupt your entire supply chain.
You can diversify by ensuring that you have manufacturing plants in different countries. This way, you will always have a solid supply even when one of your suppliers encounters problems. Diversity will also make it easier for your company to respond to changes in customer demands and market trends.
Automate Data and Leverage Technology
You should have the infrastructure, such as artificial intelligence, to gather and analyze data.
The data analysis will help you see the current and forecasted demand. The data analytics infrastructure will also help you foresee changes in demand patterns.
An automated system will dive right into the action during a supply chain crisis and start searching for alternative travel routes and suppliers. The technologies and automated data will improve supply chain processes by making it easy to act quickly and avert significant problems.
Stick to Your Area of Expertise
During a supply chain crisis, it may seem like nothing is working. If you’re a C-suite executive, you might feel pressured to make a hasty decision.
Although it is vital to be decisive, this may not be the best time to make a decision outside of your specialty. Leave that to the experts in the relevant areas. They will weigh the situation and make the most suitable crisis management decision.
Map Out Your Supply Chain
Make sure you know where the factories of your major suppliers are located. Understand what these factories make and their inventory. If there are troubles in your supply chain, you’ll identify the root cause and come up with a clear stabilization plan.
Ensure that you have a list of reliable freight transportation service providers. If you’re in North America, you can have kaiserlogistics.com as one of your logistics service providers.
Prepare for Disruptions
One vital aspect of supply chain management is knowing how to manage customers’ demands in case of disruptions. Begin by determining which product to prioritize. If two products compete for raw materials, decide which product you will invest in during a disruption.
You should also plan how you’ll meet your customers’ demands during a supply chain crisis. For example, you could increase the prices to encourage customers to buy the cheaper alternatives.
The decision you make will ensure that you don’t lose your most valuable customers due to product shortages.
Get Ready to Manage the Supply Chain Crisis
You cannot manage a supply chain crisis in a day or two. However, you can mitigate further disruption today and in the future by implementing the right risk management strategies. The above strategies will get you started on creating a resilient supply chain to ensure that your company thrives.
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