It’s all too easy to forget about a supply chain when it’s functioning smoothly. However, when there is a disruption there can be major implications. The current pandemic disrupted not only personal plans but also had an impact on supply networks across several sectors. Here are few ways your business can do to avoid and prepare for potential disruption.
A supply chain disruption occurs when there is an interruption in the normal process of manufacturing and delivering products. One holdup in any part of the supply chain can impact other areas. If one part is delayed, the whole chain can be affected. First, you should develop a plan of action that includes ways to obtain products and move goods. This can include having backup suppliers or having an emergency fund to help bridge the losses if sales are affected.
It’s also smart to consider diversifying the suppliers and having suppliers from different areas in the world. In the event of natural disaster or quality issues, you have a backup just in case. You can also use a digital twin for predicting transportation issues or delays. Having extra inventory on hand of your most popular products can also help mitigate a disruption if it occurs. This way you can set aside an inventory and minimize the overall impact of the delay. While this step may increase carrying costs, it could be well worth the expense if you face a disruption. Keep in mind also the harm to reputation among current and potential customers if they receive delays.
Check out the accompanying resource below for more information to help prepare your business in case of a supply chain disruption.
Infographic created by WSI, a service warehousing company