The supply chain can fall apart easily. If one step goes wrong, this can impact the rest of the process, which can even cause a loss of profits. For any business, this is a worst-case scenario. With this in mind, it’s no surprise why supply chain resilience has become such a priority.
A resilient supply chain can work through errors and disruptions, recovering fast with minimal impact on other areas. This can affect businesses in any industry, from healthcare and retail to hospitality and manufacturing.
To ensure you are well-prepared, this post will outline the three main ways your business can improve supply chain resilience.
Make Flexibility a Priority
Each aspect of the supply chain can be assisted by ensuring flexibility is made a priority. This can happen improve the resilience of your supply chain, although it does depend on good partnerships and the use of scalable technology. Partnering with a reliable third-party logistics (3PL) provider can help make sure these features are met.
There are a number of areas, such as warehousing and transportation, that can be changed to ensure the process is more flexible. A flexible 3PL will scale your warehouse space and fulfillment labor based on the level of demand your business is currently receiving, and this can ensure better supply chain resilience.
As for transportation flexibility, your supply chain should be able to fulfill a variety of order types in the one platform. These orders will likely come from different sales channels and be delivered as small parcels, full-truckload, or less-than-truckload. By completing these orders through the one platform, your business will build a more resilient supply chain.
Optimize Inventory Management
Balancing the right amount of inventory is a difficult task. After all, it is very easy to end up with excess stock that needs to be discounted or unfulfilled orders when you cannot meet your customers’ needs. This is why optimizing your business’ inventory management, which includes tracking the company’s stock, is essential.
Inventory turnover is a key performance indicatory (KPI) that must be monitored to ensure success when increasing supply chain resilience. This will measure the rate at which inventory is restocked and then used. By analyzing this, the business determines whether its SKU catalog should be restricted to ensure only the top revenue items are still available. Your business will find this easier to manage.
Advanced analytics paired with an effective inventory management system can be used to scale stock to meet periods of high demand. This can be crucial in several industries; it can increase supply chain resilience for healthcare and other public services. For example, during flu season, healthcare businesses will ensure their vaccine supply is fully stocked at the right time, provided in the right place, and available in the right quantity.
Partner with Several Suppliers
The final strategy to increase supply chain resilience is to collaborate with multiple suppliers. This will help to enhance and streamline each section of the supply chain process. With better communication, your business will cultivate strong partnerships with suppliers, stakeholders, and other groups.
An area where this might become an issue is with suppliers. If you only use the one supplier, your business might miss out on stock if they cannot meet your requirements, which could result in decreased sales. By having backup suppliers with the same stock, you can minimize this issue from occurring and be prepared if one company falls through.
If you want to improve resilience in your business’ supply chain, you can use one of the three strategies listed in this post.
