Disruptions in the supply chain
may be a major burden for companies of all sizes. A broken supply chain can
result in production delays, missed deadlines, and lost money.
Over two out of every five
Australian firms (41%) experienced supply chain interruptions in the previous
year, according to the Australian Bureau of Statistics. Since reaching its peak
in January 2022 (47%), this has stayed constant.
There are a few things you may
take to weather the storm if you’re affected.
What is causing the Australian supply chain disruptions?
Since the pandemic began in 2020,
supply chain disruptions have become a major issue on a worldwide scale. Driver
shortages, capacity challenges with logistics providers, inflation, shipping
delays, higher freight costs, reduced inventory levels, manpower shortages, and
demand peaks are all current issues in Australia that are generating discussion
and demanding response.
Unfortunately, a poll of
Australian firms predicts that these supply chain problems will continue
through 2023 and possibly 2024. So what can your business do to manage supply
chain disruptions? Here are five strategies for handling disruptions in your
business:
1: Establish positive connections with your suppliers
For controlling disruptions, developing a good
working relationship with your suppliers is crucial. Strong relationships with
your suppliers increase the likelihood that they will go above and beyond to
assist you in trying times.
These connections should be
cultivated year-round, not simply when you require them. You can create a solid
foundation for handling interruptions when they arise by keeping open lines of
communication and being proactive about anticipated issues.
Focus on building relationships
with key suppliers who provide essential supplies or components for your
business if you don’t have time to do so with all of your suppliers.
And keep in mind, it’s not just
about the cost. Long-term headaches (and money) can be avoided by establishing
a relationship with a supplier who is more expensive but consistently delivers
on time and offers high-quality products.
2.Plan B (and C, and D…) should be in place.
There will always be a
possibility that your suppliers won’t be able to service your needs during a
disruption, regardless of how solid your connections with them are. Because of
this, it’s crucial to have backup vendors ready to take over as necessary.
Of course, finding substitute
vendors is just one aspect of the answer. Additionally, you need to have
established procedures and methods that you can swiftly transition to without
losing any time.
This could be keeping extra stock
on hand or ensuring that you have the required documentation and approvals in
place before an interruption. Even if your main supplier is having problems,
you can prevent disruptions to your business operations by being prepared.
3: Take advantage of technology
Technology can be an effective
tool for controlling supply chain disruptions. You can automate procedures,
monitor inventory levels, and swiftly locate substitute providers, when necessary,
by employing technology.
You may manage your supply chain
with the help of a variety of software options. To get going quickly, look for
a solution that meets the unique demands of your company and is simple to use.
Before a disruption happens, make
sure you have chosen the appropriate software solution and that you fully
comprehend how it operates and what it can achieve for your business. This way
should issues emerge; you’ll be able to use it right away.
It’s critical to stay current
with the most recent trends and advancements because technology is continuously
changing. You can make sure you’re managing your supply chain with the greatest
tools available by remaining up to date.
4. Be proactive in identifying potential issues.
An ounce of prevention is worth a pound of
cure when it comes to disruptions. Most of the time, disruptions may be
completely avoided by being proactive and monitoring possible issues. For
instance, you can start looking for substitute suppliers before they become
unable to service your needs if you are aware that one of your suppliers is
having financial problems. Alternatively, you can move to a different source if
you’re having trouble receiving raw materials from one supplier before your
inventory levels grow too low.
You may prevent significant
disruptions and maintain the smooth operation of your organisation by acting
quickly.
5: Keep extra supply on hand
Having extra stock on hand is one of the
greatest methods to handle a disruption, should one occur. In this manner, you
can continue operating your company even as you search for a solution.
Naturally, having excess
inventory has its own set of difficulties. In addition to having the necessary
storage space, you also need to have the financial means to buy it. However, if
you can overcome these obstacles, having extra goods on hand could save your
life in the event of an interruption.
6.Make sure you have extra money on hand
Making sure you have extra money on hand is
another approach to get ready for supply chain disruptions. This may provide
you the freedom to adjust your business practises or look for different
suppliers.
The ideal choice for your business
will depend on the particulars of your situation. However, if you have extra
cash on hand, you can be ready for everything that comes your way.
You can lessen the effects of disruptions and
keep your firm on track by being proactive and utilising technology to your
advantage. So, start preparing right away and don’t wait till there is a
problem.