How to handle supply chain disruptions in your business

How to handle supply chain disruptions in your business

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.