Get Proactive About Supply Chain Shortages
The past few years have seen significant kinks in the supply chain due to several reasons: inconsistent buyer behavior, source material scarcity, government shutdowns, and worker shortages, to name a few. What can a business owner do to protect their businesses from shortages that result in revenue loss? Let’s take a look at a few ideas.
Source New Suppliers
Being dependent upon only one supplier for a critical item is risky. Increase your options by finding new suppliers to use as backups or alternates whenever you can. While it’s admirable to buy local, it’s not always possible. Expanding your network will provide you with a lot more flexibility, even if you have to pay a bit extra at times.
Understand Your Timeline
How accurate is your prediction of lead time? Are you providing enough time for ordering and delivery before you need the part in-house? Timelines have changed a lot in the last year. Spend some time reviewing and recalculating lead time if you need to.
Get skilled at forecasting so that you can anticipate and prevent inventory shortages before they occur. We can help you set up spreadsheets and generate dashboard reports so you’ll have better information for decision-making in this area of your business.
The more dependent your business is on a particular supplier, the more you want to develop that relationship. Adding that personal touch might not help you get your orders faster, but when troubleshooting is needed, you’ll enjoy the extra help that a personal relationship can provide.
Increase Communication and Collaboration
Increase communication with your suppliers so they can manage their own timelines and supply chains. Provide them with accurate forecasts and let them know how they can better meet your present and future needs. Remember, it’s within their best interests to serve you as best they can, too.
Audit Inventory Records Frequently
If your inventory balances are only adjusted once a year, inaccurate inventory numbers will likely cause problems. Instead, find ways to take inventory more often or, at the very least, increase the accuracy of inventory balances. The savings will be worth it; you’ll have fewer unexpected out-of-stock or back-order situations that could cost not only a loss in sales but customer loyalty.
Proactively Manage Shipping
There may be times when paying rush charges on shipping is justified. Actively managing shipping and in-transit items will help you keep a handle on this. When possible, line up alternate shipping methods in the event that one method becomes unreliable. Alternate shipping methods are especially advised with overseas shipments where more can go wrong.
Create a Supply Chain Task Force
If supply chain issues are critical in your business and have cost you profits in the past, it might be time to create a dedicated team to manage and prevent crises. Consider putting together a group of employees who can be responsible for strengthening your supply chain.
Try these ideas to smooth out supply chain woes in your business.