If the pandemic has taught us nothing else, it’s how to prepare for emergencies. One major outcome of the pandemic was supply chain disruptions. Now, four years later, we are still struggling to keep up. However, with the right strategies, brands can endure supply chain disruptions and come out stronger for it.
The Supply Chain Issue
Supply chain issues are a threat in today’s ever-changing social-political climate. Various incidents can affect supply chains including political changes, natural disasters, and unexpected pandemics.
Companies that are not prepared will be unable to fulfill orders. Operations may suffer if they don’t have the supplies they need. They risk disappointing customers and losing business.
Disruptions can be devastating, and overstocking is not always possible. But with the right risk management strategies, organizations can find the solutions they require.
Diversification of Suppliers
Companies can overcome supply chain issues by working with various suppliers. If one supplier does not have inventory available, they can use another vendor.
Organizations must prepare in advance by maintaining a database of multiple potential suppliers. They should avoid signing exclusive contracts with any one supplier.
Businesses should also consider building vendor lists from around the globe. In times of crisis, supplies may not be available in one part of the world. However, they may be able to source from vendors in different locations.
Leverage ERP System Technology
Enterprise resource planning (ERP) technology links a company’s core activities including inventory, operations, financials, manufacturing, human resources, and supply chain. It centralizes data to streamline processes. It makes companies more efficient.
Its insight into the supply chain system will be valuable in times of crisis. It makes companies aware of non-compliance issues that can lead to supply chain disruptions. It addresses problems early on to ensure systems run smoothly.
Monitor Control Towers
Cloud-based control towers also provide valuable supply chain insight. A company’s control towers will collect supply chain data from various sources including barcodes, weather, traffic, and the Internet of Things. It provides real-time information organizations can use to improve supply chain processes.
The system provides CEOs with end-to-end visibility that they can use for predictive decision-making. It helps companies identify patterns that could lead to disruptions. It provides insight into risks and opportunities that can yield valuable improvements.
Develop a Response Plan
Organizations must have a response plan in place. They must know exactly what to do in the face of a supply chain disruption. Processes include alerting customers, reaching out to alternate vendors, and collaborating with stakeholders.
The plan should be in document form and distributed to all employees. It should be reviewed regularly to determine if updates are needed. It should provide solutions for all possible situations.
Collaboration Among Partners
Businesses must promote communication between vendors and all departments that are involved in supply chain matters. They must ensure they are alerted of possible disruptions the moment they occur, or before they occur if possible.
Leaders can foster this relationship by making themselves available to vendors and teams through multiple channels. They should stay in contact on the status of orders regardless of the climate. Doing so will let involved parties know that they are concerned about supply chain status.
Additionally, any emergency plans in place should be shared with vendors. Vendors must know company response protocol in the event of emergencies. They should be prepared to act accordingly.
AI’s Role in the Supply Chain
Current and future AI and machine learning will help companies keep track of their supply chain processes and identify issues early on. These technologies are currently making headway and are expected to continue yielding results in various industries. Companies should monitor their progress and integrate them into their systems to prevent disruptions.
The technologies can provide accurate forecasting of possible disruptions based on historical trends, market conditions, and social media responses. Companies can use this data to plan production, reduce risk, and avoid understocking and overstocking.
AI and machine learning can also optimize delivery routes. They can look at factors like weather and traffic to ensure supplies are delivered efficiently.
The technologies can also alert companies when supply chain-related machinery needs maintenance. They can detect issues before they become major repairs. Companies can avoid breakdowns that lead to supply chain disruptions.
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Additional Resources
Building Resilience Through Diversification
Balancing Innovation & Risk: CEO Strategies for Successful Decision-Making
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