This article describes a few strategies to lessen and prevent supply chain disruptions. Find more here.
Having a robust supply chain strategy will make businesses more resilient to supply-chain disruptions. There are two main forms of supply management dilemmas: the very first is due to the supplier side, specifically supplier selection, supplier relationship, supply planning, transportation and logistics. The second one deals with demand management issues. They are dilemmas linked to product launch, manufacturer product line management, demand planning, product pricing and advertising preparation. So, what common strategies can businesses adopt to enhance their capability to sustain their operations each time a major interruption hits? Based on a recent study, two methods are increasingly showing to be effective when a interruption takes place. The first one is referred to as a flexible supply base, while the second one is known as economic supply incentives. Although many in the industry would argue that sourcing from the single supplier cuts expenses, it can cause dilemmas as demand varies or in the case of an interruption. Therefore, relying on numerous companies can decrease the danger related to sole sourcing. Having said that, economic supply incentives work if the buyer provides incentives to cause more companies to enter the market. The buyer could have more flexibility in this manner by shifting manufacturing among companies, especially in areas where there is a small number of companies.
To avoid taking on costs, different companies consider alternative routes. For instance, due to long delays at major international ports in certain African countries, some businesses encourage shippers to develop new roads along with old-fashioned paths. This plan identifies and utilises other lesser-used ports. In place of depending on an individual major commercial port, as soon as the delivery business notice heavy traffic, they redirect goods to better ports over the coast and then transport them inland via rail or road. Based on maritime experts, this plan has many benefits not just in relieving stress on overwhelmed hubs, but additionally in the financial growth of emerging areas. Business leaders like AD Ports Group CEO would likely agree with this view.
In supply chain management, disruption inside a path of a given transportation mode can somewhat impact the entire supply chain and, in some instances, even take it up to a halt. As a result, company leaders like P&O Ferries CEO and Maersk CEO work hard to add flexibility within the mode of transport they rely on in a proactive manner. As an example, some companies utilise a flexible logistics strategy that relies on multiple modes of transportation. They urge their logistic partners to diversify their mode of transport to add all modes: vehicles, trains, motorcycles, bicycles, vessels and also helicopters. Investing in multimodal transport practices including a mixture of train, road and maritime transport as well as considering different geographical entry points minimises the vulnerabilities and risks related to depending on one mode.