3 minute read
FUTURE PROOF
THE CHALLENGES AHEAD
FUTURE PROOFING YOUR SUPPLY CHAIN
Supply challenges can stem from raw material and component shortages to weather events that impede transit routes, to a lack of workers affecting production and distribution. No matter the reason, supply issues affect every part of business – manufacturing, distribution, and the end customer.
Almost all businesses, big and small, have experienced supply challenges over the past few years. The COVID-19 pandemic has been a catalyst for many of these challenges, but there are actions you can take to stay ahead of potential supply disruptions and lessen the impact to your business or that of your customers.
Act now. In today’s supply challenged times, building and maintaining strong partnerships with suppliers and customers is critical. Having regular touchpoints with suppliers to understand their capabilities and challenges can provide visibility to potential issues and help you plan for disruptions before you’re in the thick of it. In addition, helping your suppliers understand your needs – and pain points – will help ensure they’re able to support you if you need to quickly pivot as a result of a disruption. Equally important is staying close to your customers to understand their needs and help them understand your capabilities. Putting in the time now to build transparent and honest relationships with customers will help you gain a better understanding of their planned or expected spend based on current state but to also have conversations around activities that might require more (or less) inventory. Get in front of your suppliers and customers now. If you wait until an issue arises you may not be able to respond effectively.
Plan for the unplanned. Planning for the unexpected is possible, but you need to be deliberate. Pay attention to trends in your industry, think through unexpected situations like disasters or emergencies before they arise, review your product offer, and consider whether it makes sense to have multiple suppliers or alternate options for fast moving items that may be hard to replenish if there is a supply disruption. Thinking through these considerations carefully can help you determine the value of making strategic inventory investments for both planned and unplanned events.
Don’t put all your eggs in one basket. When you do find yourself in a situation where you have limited inventory but high demand, consider how to best allocate products to ensure you’re managing your inventory in a way that not only makes sense for your business, but also for your customers – you know, the ones you’ve spent time building solid relationships with to ensure you’re their supplier of choice. Keep in mind that when demand is high you need to balance sales with maintaining customer relationships beyond the current situation. This is also where strong partnerships with your suppliers
Mindy Weir is senior manager, distribution, at Grainger Canada
come into play. Chances are if you’re experiencing a surge in demand for a product, so are your competitors. If you’ve done a good job developing supplier partnerships, they will work harder for you to find inventory or alternate products to fulfill customer demand.
People matter. In addition to the decisions that go into ensuring you have the right type and quantity of inventory available you also need people to make it all happen – people to make the products, deliver the products, use the products to keep operations running and sell the products to end users. Hiring and retaining staff is becoming more and more challenging. To retain people, creating an environment and culture that allows people to feel safe, in terms of health and safety and psychological safety, will help ensure you have an engaged workforce and higher staff retention.
Supply chain challenges will ebb and flow but are likely here to stay. Being thoughtful and proactive about both planned and unplanned needs is critical to navigating the supply chain. SP
