Today’s environment has created supply chain disruptions throughout the world. Nearly every customer and supplier I have spoken with over the last few months has indicated production delays are prevalent or imminent. Of course, the pandemic has caused much of the recent impact, while the recent snow and ice storms that swept across the United States have further exacerbated the situation. Several other factors contribute to supply disruptions, including product issues, transportation delays or failures, cyber attacks, and of course price fluctuations.
In an effort to minimize the disruptions to your factory and your customers, planning is key. Let’s identify several ways one can prepare to minimize the effects on the organization.
- Increase inventory.
- Identify alternate suppliers and diversify your supply base.
- Conduct a vulnerable products and vendors audit.
- Partner with a logistics expert.
1. Increase inventory.
Prepare to increase your inventory, or in some cases have your supplier increase their inventory. It is not uncommon that we contract with suppliers to stock a percentage of products at their facility. Developing usage reports, we can accurately identify a base level of inventory our suppliers should carry. Occasionally, we will place a purchase order to cover a 3 to 12 month span, ensuring production time in their facility and often stabilizing the price for the duration of the contract.
2. Identify alternate suppliers and diversify.
Where possible, have the procurement team set up alternate suppliers that may not be brand specific. Our software provides us the opportunity to add alternate suppliers and alternate item codes in the event the primary supplier experiences supply delays. Diversifying the vendor base will help to ensure a consistent supply chain. Utilizing small orders with the secondary vendors ensures we have access when the supply chain begins to tighten.
3. Review vulnerable products and vendors.
Likely, the procurement team can quickly identify several vulnerable products or vendors. Analyze the weakest links and most vulnerable products first. If possible, find alternatives. Where brand specific products or vendors exist, work specifically with the suppliers to ensure adequate supply year round, before it becomes an issue. Be certain to assess potential environmental, social, and political conditions that may impact your supply routes as well.
4. Consult logistics experts.
Finding a highly qualified logistics expert is nearly impossible, but the good ones will offer solutions when disruptions happen. They’re capable of navigating methods from Sea to Air, Train to Land before most situations occur.
For example, Jeff Gentry of Landstar actively navigates shipping times based on port access and port delays. His global knowledge of active delays, including weather, labor disputes, and even backlogs at airports, has Spida Machinery committed to his expertise.
Supply chain disruptions are inevitable, but with some preplanning, minimizing those disruptions is possible. Long term planning of inventory and suppliers is essential. Additionally, working with true experts in their field will alleviate many of the hurdles that the layman may face.