So the pandemic has blown up your supply chain, and now you’re scrambling to figure out how to keep your business afloat.
You’re not alone.
Many businesses are struggling with the same issues. But don’t despair; there are ways to overcome these challenges with:
- Better Inventory Tracking
- Explore Other Business Models
- Get New Pricing Deals
- Track and Forcast Your Business
- Revisit Supplier Relationships
What Are Some Major Supply Chain Issues?
About 85% of companies experience some kind of supply chain issues that they have to overcome.
Major supply chain issues can include anything from delivery delays to inventory shortages.
These problems can cause major disruptions in a business, leading to lost profits and customers. There are several ways to overcome these supply chain issues, however.
One way to prevent or overcome delivery delays is to have an adequate buffer stock of inventory. This will ensure that you have enough product on hand to meet customer demand, even if there are delays in the delivery process.
Another way to deal with delivery delays is to work with a reliable supplier who can consistently meet your needs.
Inventory shortages can be caused by many different factors, such as:
- Natural disasters such a the pandemic
- Labor strikes.
- Production issues
- Misallocation of inventory
- Lack of regular inventory audits
- Ineffective or inaccurate demand sensing
To overcome these problems, it is important to have an accurate inventory tracking system in place. This will allow you to know exactly what items are in stock and when they are running low. You can then take action to reorder products before they run out completely.
There are also many external factors that can impact your supply chain, such as:
- Changes in currency rates
- Political instability
- An economic recession or depression
- Changes in technology
To protect your business from these types of disruptions, it is important to have a global presence and relationships with suppliers all over the world. This will help you to maintain continuity of supply, even in difficult times.
A cost increase is any increase in the cost of producing or delivering a good or service. There are many reasons why costs can increase, but some of the most common reasons are increases in the price of raw materials, labor, or fuel.
When costs go up, businesses often have to pass those increased costs on to their customers in the form of higher prices. This can lead to a decline in demand for the good or service, which can in turn lead to layoffs or even company bankruptcy.
Demand from Consumers
Demand from consumers can impact your supply chain. This can be caused by many factors such as:
- New product releases from competitors
- Changes in the economy
- Customer tastes or preferences
- Changes in fashion trends
One of the key issues that companies face when it comes to supply chain management is global complexity. A company’s supply chain might span the globe, with suppliers and vendors located in different countries. This can make it difficult to manage and coordinate all the moving parts.
The COVID-19 Pandemic has Exacerbated These Challenges.
Many companies are now struggling to get vital supplies and components from China, where the outbreak has been severe since 2020.
They are also facing difficulties getting their products to consumers, as transportation has been shut down in many parts of the world.
Global complexity can be a major challenge for companies, but it is even more daunting during a global health crisis like COVID-19.
Companies Need to be Adaptable
Companies need to be nimble and flexible in order to adapt to the rapidly changing environment. They also need to have a strong communication infrastructure in place so that they can keep track of all the moving parts in their supply chain.
One of the biggest risks in supply chain management is disruptions due to natural disasters or unexpected events. This can include anything from a power outage to a supplier going out of business.
To help minimize the risk of these disruptions, it is important to have a backup plan in place. This might include having a backup supplier or having extra inventory on hand.
Another risk in supply chain management is stockouts. This can happen when there is not enough inventory to meet demand, which can lead to lost sales and customers. To help prevent stockouts, it is important to have accurate inventory tracking systems in place.Worldwide Volatility
What’s Causing the Current Supply Chain Issues?
- At this point, we are all aware of the COVID-19. The pandemic has been causing supply chain issues since early 2020. In fact, 38.8% of small businesses reported supply chain issues due to COVID-19.
In order to ensure that your supply chain runs smoothly, it’s important to be aware of the geopolitical issues that could affect it. Here are some ways to overcome potential geopolitical issues:
- Stay informed about current events and how they could impact your supply chain.
- Plan for disruptions and have backup plans in place.
- Keep an eye on commodity prices and negotiate lower prices with suppliers if necessary.
- Make a list of potential suppliers located in different parts of the world, in case one is affected by a geopolitical issue.
Economical challenges are a major obstacle to a successful supply chain.
One way to overcome these challenges is through effective forecasting. By anticipating changes in demand and adjusting inventory levels accordingly, companies can minimize the effects of economic volatility on their supply chains.
Another way to mitigate the impact of economic fluctuations is through effective supplier management. By working with suppliers who are financially stable and reliable, companies can reduce the risk of supply disruptions caused by economic instability.
A third strategy for coping with economic volatility is to optimize the flow of goods through the supply chain. This can be done by streamlining processes, implementing just-in-time delivery systems, and using transportation and warehousing strategies that reduce costs.
Fourth, companies can partner with other organizations to create a more resilient supply chain. By sharing resources and collaborating on cross-border shipments, for example, businesses can reduce the impact of economic volatility on their supply chains.
Finally, companies can use risk management tools to help them cope with uncertain economic conditions. Risk management tools such as scenario planning and risk assessment can help businesses make better decisions when faced with volatile markets.
How Can You Overcome Supply Chain Issues?
There are a few key ways to overcome supply chain issues. Better inventory tracking can help ensure that you always have the materials you need on hand, and can help avoid stockouts. exploring other business models can help you find new suppliers or distribution channels that can help overcome problems.
Getting new pricing deals from your suppliers can also help you manage costs, and tracking and forecasting your business can help you identify potential problems before they occur. Finally, revisiting your supplier relationships can help ensure that you’re getting the best possible deals from your suppliers.
Here are some ways to overcome supply chain issues in 2022:
Communication is key: In order to overcome any supply chain issue, communication is key. Make sure to keep communication open between all parties involved in the supply chain, from suppliers to customers.
Plan ahead: We’ve seen at this point how a pandemic that people were not expecting could have drastic impacts on life as we know it.
Anticipate any potential issues that may occur and have a plan in place to address them. This will help ensure that any disruptions are minimized as much as possible.
Flexibility is key: Sometimes things happen that are outside of our control. Be prepared to be flexible and adapt as needed in order to continue operations during times of disruption.
Collaborate with others: Collaborating with other organizations can help share resources and ideas, which can help overcome any potential supply chain challenges. If we work together, we can tackle a lot of these issues.
Better Inventory Tracking
Here are some ways to better track inventory:
- Technology like barcodes or RFID tags to track items
- Use a collaborative planning, forecasting, and replenishment (CPFR) system
- Use a supplier management system to track supplier performance and identify issues
- Use a transportation management system to optimize transportation resources and routes
- Implement Third-Party Logistics (3PL) to help with supply chain issues
Using these techniques will help reduce stockouts and excess inventory, as well as issues like dead stock, which there are different reasons for.
Get New Pricing Deals
One way to overcome supply chain issues is to get new pricing deals from suppliers. This can be done by creating a wish list of items that you need and negotiating lower prices for those items.
You may also want to consider using a different supplier for some items, or find a supplier that can offer you a better price. By being proactive and negotiating prices, you can help reduce the impact of supply chain issues on your business.
Track and Forecast Your Business
This means monitoring:
- Inventory levels
- Supplier performance
- Customer demand
- Changes in the market
Revisit Supplier Relationships
It is important to revisit supplier relationships in order to :
- Ensure that you’re getting the best possible price for materials
- Make sure that suppliers are meeting your quality standards
- Identify potential issues before they occur
- Ensure that you have a good relationship with your suppliers
- Evaluate your current supplier relationships and identify any areas of improvement.
- Work with your suppliers to establish realistic expectations and goals for the future.
- Cooperate with your suppliers to troubleshoot any problems that may arise.
We discussed what some major supply chain issues are, as well as the 5 ways to overcome them. By being proactive and using technology and systems, you can help reduce the impact of supply chain issues on your business.
What are some ways that you plan on overcoming supply chain issues in your business? Let us know in the comments below!