Supply chain crises are becoming more regular on a weekly basis. Not only are companies short on staff, but many are also experiencing delays in their supply chains and missing products. IBT looked specifically at how we can weather any supply chain disruptions and arrived at these seven “can’t-miss” tips for alleviating supply chain stress.
Choose the right suppliers
This tip can be taken two ways. Making sure that you are utilizing the right-sized supplier is one aspect of it. If the supplier is too small to handle an increase in products ordered or if they are too big to not give the proper amount of personal attention to your order; both can cause issues for you and your customers.
The second part of choosing the right supplier is their location. Domestic suppliers will have an initial increase in cost because of their location. The savings of not dealing with the delays in international trade lanes have the potential to outweigh marginal increases to product costs.
Proper communication can literally be the answer to any conflict. Companies with excellent communication skills put themselves in a position to outpace their competition. Communicating regularly with your suppliers will help you have a better understanding of the products that they have on hand, in production, and if they are already dealing with shortcomings. Regular communication offers you awareness of any potential shortfalls, more time, and flexibility to get it right for your customers.
Internal communication is just as important as communicating with your suppliers. If your purchasers are unaware of a larger upcoming order then the potential exists for the suppliers to be ready to fulfill that order in the anticipated timeline.
Build mutual trust
Mutual trust is a byproduct of consistent communication and commerce. A well-established relationship that is upfront and above the board with your suppliers will nurture a relationship that is more prepared for any rush orders.
Place more orders in smaller quantities
Waiting to place larger orders might seem like the easier option for your purchasing team, but in reality, larger orders place more pressure on the suppliers. The ability to plan ahead farther and place more orders in smaller quantities helps to keep your shelves stocked but also allows your suppliers the flexibility to keep their shelves stocked and pump those products out the warehouse doors.
Also if a supplier knows that your consistent orders are going to be there, the supplier will ultimately be more willing to work with you on any larger or rush orders that might occur.
Consider placing ongoing orders
Ongoing orders are almost the same as more orders in smaller quantities. Your suppliers will appreciate your business more when they know that they can fully count on your orders being there for an extended period of time. Ongoing orders help your suppliers to understand what is expected of them in advance. Your suppliers will be able to look into the future and make sure that they have the products to fulfill your ongoing orders.
Cycle Count Program
Knowing your inventory with 100% accuracy helps your company weather any supply chain storms with ease. Your purchasing department cannot order more products without knowing how many you already have in your inventory. The inventory accuracy requires an ongoing and systematic cycle count. Developing this process, fine-tuning it once it is in place, and confirming that your inventory supplies are 100% accurate will help your company rise to the top.
Don’t know where to start? Choose your top-selling products and begin your cycle count methodology with those products.
Your Supply Chain Leadership Structure
The last tip for weathering the coming supply chain storms is to examine who is in charge of your supply chain. The person in charge of your supply chain should be a dedicated person. One that is focused on keeping procurement and fulfillment in a positive direction. If that person is not focused on the supply chain, then the gaps for things to fall through the cracks will be getting ever wider.
Want to take steps towards a leaner supply chain operation?
Taking a holistic view of ordering, supply chains, and enacting changes where possible—benefits businesses, the environment, and society. Contact your local IBT rep to learn more.