Across the global market, it has become more important than ever to have a responsive supply chain that can adapt to potential challenges quickly and effectively. A responsive supply chain can help you deal with disruptions, delays, and challenges, keeping your customers happier and your business moving more smoothly in the face of potential issues. However, it can be difficult to determine exactly how you can best manage your supply chain and maintain that high level of responsiveness and resilience.
There are several key strategies you can use to improve overall supply chain responsiveness.
1. Use a Multi-Sourcing Strategy
As a business, you cannot afford to use a single source for your goods or raw materials, especially the ones that are most vital to overall business functioning. Often, you will need to have more than one source for the goods that are most critical to your business’s needs. If you have only a single source for your products, you may find that bottlenecks or delays create substantial problems, from the inability to meet consumer demand to an ongoing struggle to generate sales and pay your own bills. A multi-sourcing strategy, which identifies more than one source for your most vital supplies and allows you to strategically choose which supplier to use as needed, can help keep your supply chain flowing more smoothly even during periods of disruption.
2. Maintain a High Level of Visibility
As supply chain disruptions continue, it has become more critical than ever to maintain a high level of visibility into every aspect of the market. You need to know:
- What supplies you need and when you will need them
- What inventory you already have on hand and where it’s located
- ow long it will take to move inventory when needed
- What inventory your suppliers have on hand
- Whether your suppliers are dealing with any potential delays that could make it more difficult for them to get those goods to you
By maintaining visibility across your entire supply chain and all of your properties, you improve the information you have on hand when the time comes to make those essential decisions, As a result, you are better positioned to determine when you may need to move inventory, which suppliers have the inventory you need, and when you may need to look for flexible or alternative solutions.
3. Communicate Regularly
To respond to potential challenges, from bottlenecks in the supply chain to shipping delays that could interfere with you getting your goods on time, you must communicate across the board. You need to know where your goods are in the shipping journey, when you can expect them to get to you, and what challenges you may face in getting that stock out.
Communicating with your suppliers ahead of time can also be incredibly helpful. When you open the lines of communication, you make it easier for your suppliers to see when you may have increased needs, including what needs you may have. As a result, they can collect inventory, speed up production, or ship earlier to help meet your demands.
4. Use Predictive Analytics
Using the right supply chain management solution can help you identify bottlenecks, shipping problems, and delays before they occur. For example, your supply chain management solution might help you think ahead to the Chinese New Year, and the shipping and product development shortfalls that often occur during that time. Predictive analytics can also provide you with insight into:
- Potential weather delays that might slow down shipping
- Ongoing holiday challenges
- Predictable increases in demand
- The average lifecycle of a product, which may help you determine when you need to start increasing or decreasing your purchase rate
Predictive analytics can help you stay ahead of potential supply chain problems and allow you to address them before they can impact your customer service quality.
5. Use Flexible Contracts
Contract flexibility is critical to ensuring overall supply chain responsiveness. With a flexible contract, you can offer flexibility and give to your suppliers: for example, establishing a range of acceptable production that may consider the highs and lows that the supplier may naturally experience over time. At the same time, those flexible contracts can also allow you to change your orders based on your current predictions, including whether inventory might need to increase or decrease, or whether you may need to have other suppliers pick up the pace in response to delays in another location.
Flexible contracts can help you save money while addressing those potential shortfalls and challenges. With a flexible contract, you can decrease or adapt your orders as needed, rather than being stuck with a static order that may not meet your changing needs over time. Flexible contracts can also lay out how long suppliers may have to respond to potential changes or modifications.
6. Use Long-Range Forecasting Strategies
To effectively address supply chain challenges, you need a long-range forecast. A long-range forecasting strategy is designed to help identify potential long-term issues and challenges. It may lay out, for example, how much inventory you will need to have on hand months out, including identifying multiple scenarios and challenges that you may face. By laying out that long-term forecast, you can better determine how your business might adapt under specific circumstances. Long-range forecasting can also help prepare your suppliers to adapt to your changing demands or needs.
Supply chain responsiveness helps keep your business afloat even during periods of difficulty. Unfortunately, all too many businesses rely on static supply chains, unchanging deliveries, and predictable metrics, even as many elements of the supply chain seem to have gone unpredictable around them. At Stock IQ, we help offer supply chain planning solutions that can help you develop a more effective, responsive supply chain. Contact us today to learn more about our solutions and how we can help you build a more responsive supply chain that is better positioned to address the challenges in today’s world.
Written by: Jeffrey Porter, Stock IQ