Is there a more upsetting word in the English language than “disruption”? For business ecosystems, disruption is the last word you would want to hear.
Effective supply chains are integral to any business ecosystem. Consumers have become accustomed to products on shelves, medical supplies, and online deliveries. When these dependencies become hindered, so does the relationship between consumer and business.
Often, accusations of employee unproductivity take the blame for these disruptions. But, in fact, this couldn’t be further from the truth.
75% of businesses experienced external disruptions in 2021. Companies, such as Apple and Nintendo, experienced shipping and manufacturing delays. The majority of the automobile industry was badly affected as well.
Disruptions create uncertainty within a supply chain, and uncertainty creates havoc. That is why business owners, manufacturers, and suppliers have begun preparation for the future. Forecasting, planning, and feedback collection are all being utilized to tackle further disruptions.
Ideally, your company will have a strong contingency plan in place to ensure operations can continue.
In this post, we’ll look at common causes of disruptions and seven ways to successfully handle them.
What is a supply chain?
In its simplest form, a supply chain is the actions required by a company to deliver goods or services to their consumer. It’s a network consisting of people, entities, information, payment solution and processing, resources, and different activities that share the same goal.
The supply chain represents the sequence it takes to get the product or service from its original state to the customer. It’s a series of interconnected steps that is integral to any successful business and effective customer service.
Supply chains reduce company costs and allow them to remain competitive in the business landscape. When running efficiently, companies will never have to ask, “What is escalation management?” as the risks are minimal.
There are many links in the sequence that need skill and expertise. If one link breaks, it will affect the entire flow of service. That’s why many tools support the building of a supply chain strategy to counter any issues that can arise.
The goal of the supply chain is to ensure there’s no delay in delivery at any point of the sequence. This ensures a faster product cycle where products and services are delivered in good condition.
Production cycles work the same way that affiliate programs work, in that every step benefits the other. Knowing how to find companies with affiliate programs is a lot easier than finding product cycles that are immune to disruption. This is because, most of the time, the disruption is out of your hands.
What causes supply chain disruption?
Supply chain disruption can be caused by both internal and external factors. These factors can interfere with the manufacturing of goods and delivery to customers. If any of the events in the chain are disrupted, the whole process could ground to a halt.
The severity of supply chain disruption can be classified into low, medium, and high events.
Low severity events have a short-term impact on progress. They have a lower downstream effect on supply chains. Examples would include weather-induced delays in which the supply chain will continue to run after it has passed.
Medium severity events impact ranges from a few weeks to a few months. An example of this would be damage to a warehouse facility. Medium severity events lead to losses in quarterly finances.
High severity events have a long-term impact on the supply chain. The issues will affect time as well as annual reports. Highly severe disruptions, such as COVID-19, can have a significant and lasting effect on a supply chain.
Causes of supply chain disruption vary. While some can be predicted, others are harder to quantify. Let’s take a look at a few examples.
Supply risks
Issues about products can happen at any instance of the chain. When materials aren’t delivered, products can’t be manufactured effectively. This enforces a downstream effect that leads to a dissatisfied customer.
Pandemics
Two years into the COVID-19 pandemic, global supply chains continue to be affected. Its effects are still being felt while people, regions, and global companies recover from its massive impact.
Due to global lockdowns, consumers were making larger than usual purchases causing many industries to run out of stock. This caused vulnerabilities, as shortages impacted each step of the chain directly.
During the pandemic, 36% of small businesses in the United States reported delays with domestic suppliers.
Working from home and video and audio conferencing have relieved some of the stresses felt in offices. But maintaining a production line with digital practices is a lot harder to enforce.
Transportation delays
Due to globalization, supply chains now incorporate international suppliers. While this increases business opportunities, it means companies depend on overseas travel.
COVID-19 saw entire countries authorizing lockdowns. This led to suspended travel, with many products never leaving the shelf. Pandemics and natural disasters can have a huge impact on the effectiveness of international supplies.
7 ways to successfully handle supply chain disruption
With the impact of disruptions increasing, organizations need to identify any future issues. Let’s look at ways you can handle supply chain disruption.
Incorporate risk evaluation tools
Risk management involves analyzing every aspect of your supply chain. It involves understanding where to streamline procedures to increase value and decrease disruption.
Digital advancements, such as MLOps pipelines, assess any potential threats. AI-enabled mapping and augmenting data provide an overview of product shortages and quality.
A feedback management system like Feedier can also help you. By gathering live, location-specific data from your suppliers and customers you can identify trends that will help you predict future problems.
Diversify suppliers and listen to them
As supply chains can be affected by many internal and external factors, it’s best to have a backup plan. Compiling a list of suppliers means you have a resolution for any future disruptions.
Having backup suppliers in various locations prepares you for geographical disruptions. It allows each step of your supply chain to continue to function efficiently.
Feedier’s geographical explorar is great here. It allows you to gather feedback from suppliers and customers in different locations, letting you know if you need to switch suppliers to combat any disruptions.
Building relationships and knowing the answer to “What is VoIP?” and the advantages of VoIP will also lead to low severity. Without backup suppliers to progress, your chain will be broken and ineffective.
Create a supply chain contingency plan
Predicting the vulnerabilities in your chain means you can prepare for all probabilities. By identifying the risks at each stage, you shorten their severity when an emergency arises.
When creating your contingency plan, the best practice is to set aside an emergency fund. It’s also a good idea to develop a time frame in which to contact suppliers, manufacturers, and consumers. It’s important to have a good account of your inventory at any given time using the best inventory management software.
As we can see in the above graph, some disruptions can be impossible to predict. That’s why it’s essential to plan for every possible outcome. Whether accessing backup inventory or estimating delivery times, all aspects are essential.
Creating a backup plan allows you to move forward strategically rather than haphazardly.
Build up your inventory
By having a detailed backup plan, you can stockpile and estimate the number of goods you’ll need.
Mobile super-apps provide an ecosystem to collect relevant inventory data. Businesses shouldn’t only prepare for emergencies. Peak periods and environmental factors would need extra stockpiling as well due to increased demand.
An example of this would be preparing for seasonal occasions.
By using Feedier you can gather data directly from your customers as to when their peak periods are. You can bring context by connecting to your other business tools and importing existing data you may have.
With this data you will know when you need to stockpile your products.
Improve transparency and collect feedback
Transparency within a supply chain allows a business to identify potential problems. If a component is only available in a certain country, you should be aware of this in your planning.
Focussing on transparency requires a deeper understanding of your supply chain. Looking at your suppliers and their suppliers helps you identify any potential risks.
You may think you have good visibility of your processes, but until all aspects are accounted for, you’re still in the dark.
Gathering as much feedback as possible also helps you prepare for future risks. People buy domain names Australia registrations due to our overcrowded dot com space. This is an example of insight and adapting.
Transparency also means you can be honest and open with your customers, which they will be grateful for.
Invest in people
Utilizing expert knowledge and providing excellent training will strengthen your supply chain. By trusting in your team, it allows you to have the freedom to act fast and find the best solutions in times of crisis.
Nurturing relationships between your workers and your supply chain gives you a better idea of where their strengths lie. It also allows you to flag any potential issues early on.
This is where Feedier comes in. By combining their survey builder and analytics suite you can create short, interactive surveys to find out exactly what your employees need to excel in their positions.
Effective training and expertise give professionals the right skills and judgment to thrive, establishing a mindset that tackles disruptions head-on.
Invest in technology
Companies that have undergone a digital transformation are at an advantage when it comes to disruptions. Imagine if you weren’t able to connect digitally during the pandemic. Your supply chain would have been at risk of collapsing.
Investing in logistics 4.0 digital transformation visibility allows for strategic decision-making. It puts you one step forward rather than two steps back.
Don’t underestimate the benefits of investing in a feedback management system such as Feedier.
The combination of feedback collection and analysis can help you to predict future disruptions and deal with unavoidable problems.
Wrapping up
Unpredictability is a common occurrence within supply chains. But what is not unpredictable is the success of planning. While disruptions can cause major issues for your business, they don’t have to spell the end of your business.
Preparing all aspects of your supply chain and continually gathering feedback will prevent long-term issues going forward. As the old saying goes, failing to prepare is preparing to fail (I think James Corden said that).
Bio: Jenna Bunnell – Senior Manager, Content Marketing, Dialpad
Jenna Bunnell is the Senior Manager for Content Marketing at Dialpad, an AI-incorporated cloud-hosted unified communications system that provides valuable call details for business owners and sales representatives. She is driven and passionate about communicating a brand’s design sensibility and visualizing how content can be presented in creative and comprehensive ways. Jenna Bunnell also published articles for domains such as SME News and Together Platform. Check out her LinkedIn profile.
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