As a result of recent disruptions in the supply chain industry — such as the pandemic and transportation issues — many business owners have begun to take a deeper interest in supply chains. This comes as no surprise, as supply chains can have a massive impact on a business owner’s ability to run their operations smoothly.
While being familiar with supply chain management and why it’s important can be a great start, business owners who are serious about succeeding in today’s changing business landscape can benefit from implementing certain supply chain strategies.
Here are four supply chain strategies to improve your business practices.
Utilize Data to Predict Demand
As a business owner, you’re likely familiar with the process of predicting what trends and products will become popular in the near future. If you figure this out too late, you run the risk of missing out on new, lucrative opportunities.
On the other hand, if you’re assumptions are wrong, you could find yourself stuck with an enormous amount of product that you can’t move. Seeing that knowing what products to produce can have a significant impact on your business, it’s important to be able to identify and predict coming trends with accuracy.
With the help of data, decision-making becomes less risky. This becomes even more true when it comes to supply chains. With the use of data, you can identify which trends are slated to grow in the near future, while also predicting how supply chains will be affected.
For example, your data may show that notebooks are likely to rise in popularity in the coming months. By acting on this data quickly and ordering a large number of notebooks, you may be able to avoid supply chain issues that arise later once more businesses begin to order large quantities of notebooks. These supply chain issues can range from higher prices for notebooks to longer wait times for production and transportation.
As can be seen, data can make a huge difference in your ability to do business effectively and properly utilize supply chains. In addition, this is just one of many ways that your business can benefit from data-driven decision-making.
Always Prepare for the Worst
While data-driven technology may be able to help you predict some problems that might arise in your supply chain, the reality is that supply chain problems will arise at some point. You can prepare for supply chain issues in several useful and effective ways. One simple way to lessen the effect of supply chain problems is to keep large stores of inventory. This way, if a supply chain is slowed or stopped, you have enough product for your business to continue operations until the problem is solved.
Imagine, for example, that a metal manufacturer factory is burned down by a wildfire. If you’re storing a large number of metal hooks that your business sells, you’ll be able to find a new supplier and fix the situation before you run out of inventory.
In this way, preparing for supply chain problems allows your business to continue business as usual without being negatively impacted by hiccups in the supply chain.
Invest in Integration Technology
One of the biggest problems that business owners have when it comes to supply chains is integration. Put simply, this means that each link in the supply chain is usually on its own page, with little to no communication with various other links in the supply chain. This lack of communication and integration can cause serious issues when miscommunication results in severe problems.
Thankfully, new technologies are making supply chain integration easier than it has been in the past. With these new forms of (typically cloud-based) technologies, integration can be digitalized and housed in one platform. Being able to integrate supply chains in this way can help business owners avoid unforeseen challenges that commonly arise in supply chains.
For example, imagine a rubber producer is having a problem producing rubber due to a power outage. Meanwhile, a manufacturer is pouring money into creating molds for a certain type of toy with the hopes of recouping the costs as a result of being the first manufacturer to offer these in-demand toys.
However, the manufacturers are unaware that there will be a delay in the rubber production, thereby missing their opportunity to be the first manufacturer of the toy and being unable to recoup the money for the molds.
As you can see, integration can allow links in the supply chain to operate far more smoothly. Without the communication brought upon by integration, you run the risk of running into similar problems all of the time. By investing in integration technologies, you reduce the amount of risk your business faces.
Make More Supply Chain Connections
While it’s always good to have a deep relationship with your current supply chain connections, it can be useful to foster connections with other potential supply chain partners. Supply chains are always evolving and there are a few reasons why it can be useful to have other supply connections.
One reason it’s good to have a broad range of supply chain connections is that your business may pivot at some point and you may want to sell products that you’re current supply chain connections aren’t able to produce. Another important reason to have a wide range of supply connections is that your current connections may end up having irreparable problems.
For example, if your wood supplier experiences a flood, they may decide to retire rather than go through the process of rebuilding their operation. When this happens, you don’t want to be left without anyone to go to.
By having more supply chain connections, you’re always able to pivot quickly and ensure that your business operations can continue.
Strategize Now and Avoid Problems Later
While supply chains may seem like a distant process to some business owners, they can actually have a monumental effect on your ability to do business. As such, rather than watching your operation crumble as a result of supply chain problems, it’s important to have strategies in place to ensure that you’re able to handle any issues that may arise.