The world economy relies on the global supply chain’s ability to react quickly to shifting consumer demands. One supplier not pulling its weight can instantly impact sales, revenue, inventory and total cost. From a customer’s perspective, failing to meet demand can lead to a multitude of issues.
The pandemic has revealed multiple supply chain risks, with most, if not all, feeling the effects of the disruption. The fault lines have well and truly been revealed.
With the future uncertain, it’s up to companies of all shapes and sizes to prepare for more disruption.
With that in mind, here are a few ways to better protect your bottom line.
Better supplier diversity
Many of the clients we work with daily had tier-one suppliers in mainland China. This time last year, the factories being shut down across the region meant a sharp decline in Chinese exports. This disruption was felt at every point on the supply chain.
While China is still the most cost-effective way to produce materials and suppliers, it’s pertinent there isn’t an over-reliance on any one particular region. This means an investigation into the costs, risks and logistical needs of working with suppliers in alternative areas. A diversification means if one domino falls, another can take its place without the fear of collapse.
Better data utilisation
Covid’s impact has been unbalanced, affecting different regions to a varying degree. Because of this asymmetric impact, regional and personal data dependencies are a must.
Supply chain risks and their management need transformative strategies – including multiple sourcing, less just-in-time processes and more near-shoring. This needs to bring with it more visibility and vigilance of supply chains using data to underpin decision making.
With new strategies put in place, determined by data-backed information, companies can make changes to future-proof operations without the fear of the unknown.
Near-shoring of supply chains needs to be prioritised if we’re to avoid the countless instances of inventory disruptions we saw last year – as just-in-time production methodology was exposed as a massive driver for the disorder.
Companies will have to outline a balanced approach between stockpiling and just-in-time production for better inventory management. This all depends on the industry, of course, but ensuring there’s enough stock for the month ahead and better-utilising stock delivery and intake needs re-examining.
Better supplier onboarding processes
From now, supplier onboarding and collaboration needs intelligent, digitised and self-serve operability to improve information immediacy, data quality and dispute resolution across a supply chain.
New relationships need to be established based on data-backed trust and transparency, enabling better risk mitigation, reduced expenditure and more innovation. World-leading companies across different industries are already using smarter supply chain solutions infused with AI to simplify onboarding, end to end order management and supplier relationships.
Better supply chain visibility
With limited visibility into tier-one suppliers, the supply chain risks that come from their sub-suppliers is a risk you cannot manage. Businesses need to employ software that grants total visibility of order management to identify and resolve risks before they become an issue further down the supply chain.
Continuous monitoring and refinement of suppliers are crucial to prevent revenue leakage and inventory shortages while guaranteeing a resilient supply chain. Using analytics powered by AI and ML technology, end-to-end visibility is achievable, as is the betterment of working relationships with all suppliers and customers.
At the end of the day, supply chain risk management is a crucial undertaking. The pandemic has shone a light on multiple inefficiencies across thousands of organisations – and this year is about putting the right technology in place to ensure this kind of disruption doesn’t happen again.
OmPrompt is one such solution. It was designed and refined to be a platform with future-proofing DNA woven into its fabric. With automated order management, you can ensure business as usual while using the metrics we produce to define smarter and more profit-boosting outcomes.
Fill out the box below to keep up with our resource articles, direct to your inbox every week!