How to respond to a supply chain disruption is a skill that will determine whether you can overcome the situation or flounder in it. There are a lot of variables in a supply chain. A lot can go wrong, from difficulties in manufacturing to issues with eCommerce fulfillment centers and delivery problems.
A small disruption anywhere can mean delays, damage to your brand, and an all-around negative effect on you and your customer.
Let’s learn how to deal with sudden changes, supply chain crises, or when there’s an obstacle to meeting expectations from all sides.
Plan Ahead of Disruptions
The key point is that we know that supply chain disruptions will be more likely to occur at some times of the year. During the winter holiday season, delays are typical.
A business should pursue measures in advance to prepare for these times when they can, such as inventory forecasting, because there will be other times, such as during the pandemic, when supply chain disruptions will occur out of nowhere.
Natural disasters – including hurricanes, flooding, and earthquakes – can lead to power outages, property destructions, and geographic emergencies that shut down manufacturing plants and important supply chain touchpoints.
Transportation delays can occur due to weather, increased demand for shipping, or several factors.
Price fluctuations are another supply chain disruption, often due to supplier availability, resource usage, inflation concerns, etc.
Cyber attacks and security breaches can lead to supply chain management being unable to proceed.
Political conflicts and pandemics, regional or global, can cause delays and shutdowns in parts of the world that play a role in your supply chain.
Have Alternative Suppliers and Diversify
When you do your business exclusively through a single supplier, and they fail to deliver in some way, your entire supply chain is at risk. How to mitigate this is to diversify. Have multiple suppliers. Have a way to fulfill shipment orders if your main supplier is out of commission for a little bit. Ecommerce fulfillment services can help you plan ahead of disruptions.
Research and invest in supplier relationships that you can build from. In an emergency, you can pivot to teams, suppliers, and opportunities that can help you overcome what’s in front of you.
Anticipate by Accumulating Inventory
Consider how much inventory you have and what you may need to cover a delay or disruption. Be ready for periods of higher-than-average demand. No business wants out-of-stock products. This affects the potential to make immediate sales and is not a pleasant shopping experience for the customer.
Have accurate inventory numbers and understand what you need in backup inventory to keep your supply chain operating in the face of a problem.
Best Way to Manage Supply Chain Issues: Communicate
Do not leave your customer wondering. If a delay, unavailability, or problem affects their order, communicate with them. Advise them of a potential shortage or a supply chain disruption. If needed, offer alternative arrangements. Provide as much information as possible and let them know you’re working hard to remedy the trouble.
Also, include a timeline of when you expect things to be resolved if you’re aware of one. By avoiding possible customer dissatisfaction and being honest, you may help alleviate the backlash that could otherwise be on its way.
Consider Investing in Third-Party Logistics for Shipping
Third-party shipping logistics is another way to mitigate the risk of supply chain disruptions. Third-party logistics are services that will offer you their space to house and ship your inventory. They take care of fulfillment services on your behalf in exchange for a fee.
They are experts in shipping and can aid if something goes wrong. Third-party logistics services have many advantages, including cost savings, flexibility, scalability, and improved customer satisfaction.
Leverage Your Digital Data to Look at Analytics
Whether you are using a fulfillment service or going about shipping on your own, in many cases, product purchases and orders, and fulfillment create lots of data. Leverage it. Look at the analytics to assess where a solution may exist with a supply chain disruption.
Not only do you need to resolve the disruption as quickly, efficiently, and safely as possible, but the solution has to be permanent, so be sure to consider all possible ways to move forward.
Optimize Your Supply Chain for the Future
There are several routes you can take to better set yourself to succeed in the face of supply chain problems. Here are a few ways to optimize supply chain management to prepare for the worst.
Use inventory tracking to have visibility on a product as it ships. Various services will provide real-time updates, helping you understand where things could be better managed or identify supply chain disruptions in their early stages.
Be smart with your production. When there is a material shortage or cost increase, don’t wait to resolve it. Look at what products you’re selling most and with the highest profit margin, and ensure they are prioritized in the production stages.