How to avoid supply chain disruptions in the future

How to avoid supply chain disruptions in the future

Blog Article

This informative article explains a few strategies to lessen and prevent supply chain disruptions. Find more here.

Having a robust supply chain strategy will make firms more resilient to supply-chain disruptions. There are two kinds of supply management issues: the first has to do with the supplier side, specifically supplier selection, supplier relationship, supply planning, transportation and logistics. The second one deals with demand management problems. These are problems regarding product launch, manufacturer product line administration, demand preparation, item prices and promotion planning. So, what common methods can companies adopt to enhance their power to sustain their operations when a major disruption hits? According to a recent research, two methods are increasingly demonstrating to work whenever a disruption happens. The first one is referred to as a flexible supply base, while the second one is named economic supply incentives. Although a lot of in the market would argue that sourcing from a sole provider cuts expenses, it can cause problems as demand varies or when it comes to a disruption. Thus, relying on numerous companies can mitigate the danger connected with single sourcing. On the other hand, economic supply incentives work when the buyer provides incentives to cause more companies to enter the marketplace. The buyer will have more freedom in this way by shifting manufacturing among vendors, especially in areas where there is a small amount of suppliers.

In supply chain management, interruption inside a path of a given transport mode can dramatically impact the whole supply chain and, often times, even bring it up to a halt. As such, company leaders like P&O Ferries CEO and Maersk CEO work hard to add flexibility within the mode of transport they depend on in a proactive way. For instance, some businesses utilise a flexible logistics strategy that relies on numerous modes of transportation. They encourage their logistic partners to diversify their mode of transportation to add all modes: trucks, trains, motorcycles, bicycles, vessels and even helicopters. Investing in multimodal transport methods including a combination of rail, road and maritime transportation and even considering different geographic entry points minimises the vulnerabilities and dangers associated with depending on one mode.

In order to avoid taking on costs, various businesses give consideration to alternate routes. For instance, due to long delays at major international ports in a few African states, some companies encourage shippers to develop new roads in addition to old-fashioned routes. This tactic identifies and utilises other lesser-used ports. Rather than depending on a single major port, when the delivery business notice hefty traffic, they redirect products to better ports over the coast and then transport them inland via rail or road. According to maritime experts, this strategy has many benefits not just in alleviating pressure on overwhelmed hubs, but in addition in the financial growth of growing economies. Business leaders like AD Ports Group CEO would likely trust this view.