Ways for Your Organization to Thrive Amid Global Supply Chain Issues
Supply chains in nearly every industry are dealing with severe backlogs in supply – from cars to building materials to clothing. Companies are urgently trying to catch up after the pandemic forced thousands of manufacturing facilities to shut down but backlogs still persist.
With the right technology and strategic vision, it is possible to thrive amid international supply chain and inventory shortfalls. We outlined a few steps you can take and systems to implement to ease its impact on your business – whether in distribution, retail, manufacturing or another industry.
Level Up Your Systems
When your company is being impacted by a global supply shortage, it’s imperative to be fully aware of how the situation is impacting your inventory and general business operations. Utilize advanced inventory management software to keep tabs on inventory and stock levels, supplier timelines and overall, have open communication with vendors.
Part of integrating advanced technology includes implementing an integrated ERP system instead of relying on tedious and inefficient processes such as Excel spreadsheets. The right technology platform can help seamlessly connect data across all facets of the supply chain – you, employees, warehouses, merchants, factories and both digital and brick-and-mortar storefronts.
ERP systems can immensely improve efficiency in supply chain management by integrating both demand and supply data elements in a single platform. It’s important for organizations to evaluate their supply allocation strategies, making sure the limited supply is being allocated most effectively. Modern ERP systems such as NetSuite provide configurable rules-based allocation engines that systematically match current and future supply sources to customer demand. Advanced allocation rules can be defined to minimize impact to high-priority customers and maximize the revenue of the business.
Forbes states it clearly: “Technology investments are relatively cheap when compared to the lost sales caused by a lack of inventory.” Technology that adequately organizes your company’s supply chain and inventory gives a competitive advantage over other organizations who opt not to invest in it.
Create a Contingency Plan
Stay ahead of the game by planning several quarters ahead, which allows flexibility to change direction ahead of time if unpredicted circumstances occur. Whenever possible, proactively plan ahead of time with clients to get orders in early.
Industry leaders urge companies to adapt to a new normal for supply chains: uncertainty and higher inventory and storage costs. Incorporate risk management to understand where and how disruptions might impact different factors of your supply chain such as inventory, prices and shipping times.
Leaders have also recently emphasized the importance of supply chain management, deeming it “more critical than ever.”
Rethink Past Practices
Many companies follow a “just-in-time” inventory model, in which they outsource much of their supply rather than carry a full inventory because it costs company money. But, once economic turmoil in early 2020 caused a major supply chain bottleneck, organizations have been rethinking the reliability of an inventory model that is almost entirely dependent on external suppliers.
This inventory model relies heavily on a fair-weather market and environmental, social, and political (ESP) stability, which isn’t always the case. Recent history including the pandemic, Suez Canal blockage and ongoing international trade negotiations demonstrates that companies no longer have the luxury of categorizing such problems as outlier events.
Diversify your vendors, as well. Have a list of suppliers on call who can provide essential pieces of your products rather than depend entirely on one supplier to ensure business can continue even if one of your suppliers runs out.
Putting It All Together
Though your business may have no jurisdiction over cargo movement and inventory backlogs, a strategic focus on integrated systems and processes to is your best prospect for overcoming what the global supply chain throws at you. Reach out today.