The COVID-19 pandemic is one of the significant factors that has upset the global supply chains and left many companies on their feet. And since a supply chain is usually delicate, just a small link of disruption can significantly impact your business. So are there steps you can take to maintain the business endurance and lower the impact of unpredictable disruptions?
While there might not be an excellent answer to preventing a supplier’s chain disruption, the key thing to do is be prepared and minimize its effect. Fortify your logistic operations and be prepared.
5 ways you can prevent a supply chain disruption
There are various strategies that you can use to combat a disruptive situation.
Know the risks of a supply chain disruption and have a proactive contingency plan
This will make you flexible to adjust your operations whenever faced with irregularities swiftly. Besides, business continuity plans handle emergencies only after they have happened. So, ensure that you are aware of the risks and prepare yourself if an adverse event affects your key suppliers. For instance, it is a good idea to have a car accident attorney by your side in case your supply chain is disrupted by an accident.
Diversify your supply base
You can protect your business from supply disruptions from one supplier by dividing sourcing activities between numerous suppliers. However, it is essential to note that there are some costs associated with this strategy, just like with any other one. Therefore, you can engage various supplies in different locations to reduce economies of scale and increase monetary costs. Also, you must ensure that the cost needs are balanced with the value of the disruption impact.
Have an emergency management centre
A supply chain disruption can be caused by natural disasters, artificial problems like fire, cyber security, geopolitical events, or financial and company feasibility. Therefore, you must have centralized information and decision-making functions during any of these times. All your data should come to a single place to all decision-making easier.
In case of a pandemic like the coronavirus, you can have most of your business functions done virtually. So, have one team focus on the employees’ worries while the other is taking care of the business ecosystem, taking care of suppliers and your clients.
Have good communication
When it comes to any crisis, communication is the key. Your company should be ready to communicate with all the stakeholders, including the employees, customers, shareholders, media, analysts, and the community.
The critical thing here is to speak with a unified voice and get someone who will share correct information about the crisis and what the company is doing. That single voice has to tell everyone precisely what is going on.
Manage product demand
If you find it too difficult to implement the above strategies, there is an alternative way to prevent a supply chain disruption, manage your product demand. There are two alternatives when it comes to managing your demand, rationing, and switching.
Bottom Line
You must carefully deliberate these strategies when coming up with a risk management plan for your global supply chain. And while there is no one way to prevent or minimize all the possible disruptions at once, you should carefully consider a strategy that uses various approaches acting in harmony to prevent these disruptions and have a speedy supply chain.