Did you know that the global supply chain crisis has wreaked havoc on businesses worldwide? In fact, experts predict that it will take up to mid-2024 for things to get back to “normal.”
However, just as the world was recovering from the effects of the pandemic, supply chains have been disrupted once again. This has brought industries to their knees, leading to losses worth thousands of dollars.
So what can businesses do to overcome this crisis? In this blog post, we will discuss some strategies that can help your business weather the storm:
Supplier Base Diversification
Diversifying your supplier base means having multiple suppliers for each product component. This allows you to quickly pivot when one supplier experiences a disruption.
For example, let’s say you source a particular product from China. But there was an unexpected event that disrupted production in that country. If this is the case, you can source the component from another supplier in a different country.
You can do this by conducting a comprehensive supply chain risk assessment. This helps you identify which suppliers are critical to your business and where there may be vulnerabilities.
Once you’ve identified potential risks, you can develop mitigation strategies. These may include sourcing from multiple suppliers or chartering your products from different geographical regions.
Be Flexible With Your Manufacturing Process
Flexibility means being able to switch between different suppliers or manufacturing processes quickly. This can be difficult to do. That’s because it requires significant investments in both time and money.
However, supply chain disruptions are becoming more common today. Hence, it’s essential to have a manufacturing process that adapts to changing conditions.
Localization involves working with manufacturing and assembly plants closer to your customer base. Localization is an excellent strategy because it cuts down on transportation costs. Transportation makes up a significant part of the total cost of goods sold.
Additionally, localization shortens supply chains and reduces the risk of delays or disruptions. However, localization also has its challenges.
One of them is that it can be challenging to find qualified workers in specific locations. Likewise, you may need to redesign your entire supply chain. This can be a costly and time-consuming venture.
Avoid overpromising or overselling
Inventory management is key during a supply chain crisis. You need to have enough inventory on hand to meet customer demand. However, you also don’t want too much inventory that it ties up working capital.
The key is to avoid overpromising or overselling. This can be difficult to do when the competition is undercutting you on price. But if you overpromise and can’t deliver, you will damage your reputation.
Another way to manage inventory is to use just-in-time (JIT) manufacturing. JIT involves manufacturing products only when there is customer demand. This helps you avoid the cost of storing excess inventory.
Use the Above Strategies to Overcome Global Supply Chain Crisis
Supply chain management is a critical aspect of any business. Hence you should give it the attention it deserves.
The global supply chain crisis has caused many companies to reevaluate and find ways to improve their supply chains.
Our strategies above are great for companies looking to overcome these challenges. No matter which strategies you choose to implement, the most important thing is to have a plan in place.
By being proactive and prepared, you can overcome the supply chain crisis. This helps you keep your business running smoothly.
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