Supply chain stability is one way to help manage risk and enhance productivity by protecting your brand reputation and increasing revenue.
Employ these 5 tips to ensure supply chain stability:
1. Monitor sources
Ensure that your suppliers are stable and able to provide for your needs by understanding all tiers of the supply chain and the nature and importance of each tier. This includes lower tiers that might otherwise be overlooked. Focus on things like the supplier’s financial stability, the company structure (to weed out any business conflicts) and whether the supplier’s location is safe and convenient.
Routine audits are an important part of the monitoring process. As markets become increasingly global, companies are subject to more stringent regulations on things like environmental and human rights concerns. Again, delve deeper than just the first two tiers of the supply chain to ensure compliance and protect your corporate social responsibility. Consider performing audits unannounced.
2. Projections
Understand market fluctuations. In addition to having your team look at consumer market projections for things like seasonal holiday rushes, also consider supplier trends in areas like automation and transportation.
One of the biggest trends to affect both consumers and suppliers is the Internet of Things (IoT). With a projected 21 billion IoT devices in circulation within the next few years, IoT will be a major player in future supply chains. With the integration of smart sensors into supply chain processes, tracking (and leveraging) data on things like order fulfillment and truck delivery will greatly increase the accuracy of your projection estimates.
3. Bank
Consider creating a bank for your products as a form of insurance. In uncertain times, banking is a good way to ensure production and, ultimately, your ability to sell.
4. Logistics capacity
Work directly with your logistics company to understand and assess their capacity to endure challenges within your supply chain. Request that they break down their capabilities and include foreseeable scenarios with action plans that lead to agreed-upon resolutions.
Assessing the logistics capacity of your suppliers should be done by direct requests for information or site visits. Make sure to determine technology, staffing, transportation, and storage capacity. Ensure that plans are in place to respond to market and supply fluctuations.
5. Communicate
The overall lesson here is that communication is key, both with your internal team and your suppliers. Keep an open line of communication and request supply reports or real-time information on your supplies, logistics and inventory levels to stay up to date and ahead of trouble.
Consider transparency in your supply chain and how sharing relevant information within and between suppliers can help optimize the entire chain. Open communication will lead to better insight between appropriate parties, quicker problem solving and help avoid costly delays due to silos.