Since the start of the pandemic, the supply chain market has faced multiple severe disruptions and setbacks. Every industry has struggled as a result, and many still continue to struggle even now.
As leaders in the supply chain management industry, our team at Stimulus recognize how difficult it can be to try and rebuild after the devastating effects of the pandemic and the shortages that came along with it. That’s why we’ve compiled this list of some of the most effective ways to reach true supply chain resilience just in time for the new year. By embracing these methods this quarter, you can start seeing the results of your refinement and begin to get back to your definition of normal as a brand leader or owner in no time.
- Manage Inventory and Supplier Costs
Far too often, companies make the mistake of hoarding inventory and working with suppliers that are not cost-effective and reliable. To create supply chain resilience and more profitability moving forward, company leadership must be willing to look at inventory and supplier data to make refinements for the greater good.
To manage inventory, take a look at your inventory-to-sales ratio in comparison to your warehouse costs and orders monthly. More often than not, you will find that your inventory levels are far higher than the other two unnecessarily. To counteract this, try offering a sale to your customers on your current inventory and then only keep the inventory you know you will sell in your warehouse space moving forward. You may even be able to move to a smaller warehouse space with this method and save money on your overhead likewise.
Similarly, when it comes to your supplier costs, taking a look at their reliability, product quality, distance, and relationship with your business from a data perspective can help you determine whether or not they are truly a reliable supplier worth their price. If you find that they are not, it may be time to turn to local and more reliable suppliers that have fair pricing and better communication.
2. Multisource From Suppliers for Consistency
Increased redundancy is one of the best ways to ensure supply chain resilience in 2023. Although it’s very common for smaller businesses to turn to one or two suppliers solely for all of their products, this is not how large businesses operate — and for good reason. In order to compete with the ‘big dogs,’ you have to be ready to think and act like them as well. After all, even the exclusivity and cornering of the supply chain market is by design and carefully nurtured by these massive brands and suppliers. Therefore, in order to catch up, you must be willing to weigh your options regularly and have multiple backup suppliers in the case of disruptions or recalls.
To find suppliers that fit the bill and are reliable, local, and affordable, you must be willing to turn to diverse and local suppliers rather than the same name brand suppliers your competition utilizes. In this way, you can eliminate the disruptions caused by overseas and disconnected suppliers like the ones other companies are sure to associate with in your industry.
3. Localize Your Supply Chain Network
As you build upon your supply chain redundancy, you will also want to localize your network as well. Working with local suppliers will help you to eliminate the common setbacks and connection problems that overseas supply chains face. During the pandemic, the brands that worked with American suppliers were the only ones capable of still meeting the demands of their customers. These brands also saved money on warehouse costs as their need to hoard things to reduce delivery times was low. In fact, during this time, small companies and local suppliers thrived solely based on their ability to keep producing the products that large brands could not.
To best localize your supply chain network, you will want to first work on supply chain diversification. This will help you to find local diverse suppliers to work with that are reliable, appeal to your customers, and can be communicated with consistently. You will also want to ensure that they understand your protocol and needs upfront as many local and diverse suppliers will likely need to readjust their overhead as well to meet your requirements.
4. Eliminate Current and Potential Bottlenecks
In most supply chains, there are bound to be bottlenecks or the potential for bottlenecks in the future. Knowing this, it’s all about automation and standardization. By standardizing the entire supply chain process, you can ensure that every part of your supply chain works together seamlessly and knows its part to complete the job efficiently and profitably.
Similarly, automating your supply chain can help you to eliminate unexpected variables and to make sure every customer you work with has the same experience of timeliness and high quality when purchasing from you.
Although you can work on these processes on your own, it is far easier to work with an experienced supply chain management company that can analyze your data, report any current or potential bottlenecks it finds, and break down a plan to streamline your supply chain moving forward.
5. Embrace Supply Chain Diversity
Lastly, as discussed above, diversifying your supply chain can help you actualize supply chain resiliency just in time for the new year. There are many positive aspects to a diverse supply chain including innovation, redundancy, driving up competition in your market, gaining access to new networks, and showcasing your dedication as a brand to inclusivity and progressivism. On top of this, many diverse suppliers are also eco-friendly which appeals to Millennial and Gen Z consumers in a major way.
To begin to embrace diversity as a company in your supply chain, you will want to assess your current supply chain network and look at the diverse suppliers in your local area to find which can meet your needs and connect with your company.
Stimulus can help you facilitate supply chain resilience in no time. To learn more about our platform, request a free demo with our team before the next quarter begins. This will give you more than enough time to find great suppliers, create a stronger network, and streamline your production process before 2023 begins.
Although the supply chain market is recovering slowly but surely, you can still expect to see supply chain issues in 2023. This is exactly why this quarter is the perfect time to redefine your brand’s supply chain network, optimize your process, and embrace the new diversity efforts that are sure to help stabilize your supply chain moving forward. So, what are you waiting for? It’s time to define the inclusive and empowered supply chain future your brand and your market truly deserve!