Nothing has been easy in the supply-chain industry for the last several years. Whether its disruptions caused by covid-19, labor shortages, port bottlenecks or the current inflationary environment, adapting to change has become a way of life for supply-chain professionals. But are the changes we’re incorporating making a difference?
Many supply-chain professionals fear that they’re not making positive, long-term changes for their companies. A recent survey of 3,000 CEOs indicated that 94% expect drastic changes to their business model within the next three years. The focus right now seems to be on short-term changes with 58% of respondents saying they're focused on changes such as; paying more for materials, products, and transportation, and raising prices. These strategies may help them in the short term, but longer-term solutions are harder to make. 77% of these respondents feel that the steps they're taking are not addressing supply chain disruptions.
So, where do we go from here? There are several crucial strategies for creating a resilient supply chain that is ready for an ever-changing world. In this article, we’ll discuss these strategies and give some real-world advice for creating a flexible and responsive supply chain in your own company.
Making a resilient supply chain
For as long as there have been supply chains, risk management has been at the forefront of people’s minds. Finding the best way to move products around the world and provide the best quality experience to customers is vital to creating a successful business. Having a supply chain that can flex and respond to global circumstances is the best way to do this. Some of the key strategies for a resilient supply chain include the following:
- Synchronizing components
- Leveraging multisource and distribution networks
- Putting inventory buffers in place
- Adopting standardized processes
Incorporating web or cloud-based software into your business can help you synchronize data across warehouses and bridge the gap between geographically dispersed locations. Having a system which synchronizes your warehouses and transportation information allows for rapid detection, response, and recovery from many disruptions.
Multisource and distribution networks
Another key to creating a responsive supply chain is to reduce the risk of bottlenecks by having diverse supplier and distribution networks. For example, if one supplier is unable to provide your products in a timely manner, having another supplier that you’ve already built a relationship with to provide your products can be a solution for this disruption.
In addition to leveraging different sources, having a wide-reaching distribution network allows you to get your products to your customers quickly. This helps your business stand out in the competitive e-commerce landscape and builds customer loyalty.
One of the biggest challenges in warehouse management is stocking the right amount of product that can respond to both surges and constrictions of demand. Setting up inventory buffers is one tool you can implement to help your business keep the right amount of product on-hand. An inventory buffer is simply keeping inventory of specific SKUs on-hand in case of unexpected delays in supply chain, transportation disruptions, or surges in demand. This can be especially useful if you’re utilizing social media to market your products because products can go viral and a huge spike for a specific SKU can occur.
Regardless of the strategies your business takes, having the ability to leverage data from previous consumer trends can help you more accurately forecast the needs of your inventory.
Adopt standardized processes
Incorporating a standardized process for receiving, processing, and shipping orders is critical to having a resilient and responsive supply chain. One of the simplest ways to streamline your order process is to incorporate automated business rules within your WMS or ERP software. An automated business rule is simply a set of rules a business dictates to manage and respond to certain instances. Business rules contain two elements; a condition and an action. A business will dictate that when a certain condition is met an action should occur. An example of a business rule is as follows:
- When a Shopify order of a certain order value is received, it should be shipped by carrier x
- Shopify orders is the condition
- Shipping by carrier x is the action
When consistent practices are in place, redundancies and missteps are easier to identify.
Whether your business is just beginning to expand its distribution or if it's trying to get its feet back on the ground after the last few tumultuous years, having a resilient supply chain is the key to success. Incorporating long-term, effective solutions such as synchronizing components, leveraging multisource and distribution networks, implementing inventory buffers, and standardizing processes will help your business respond to and overcome supply chain challenges.
iDrive Logistics is a leader in data-driven solutions for companies of all sizes. If you would like to learn more about our solutions, contact us on LinkedIn or through our website!