It’s easy to forget about logistical disruptions when your supply chain is running smoothly. That being said, how can you develop a plan for inevitable supply chain disruptions?
The current pandemic has had a large impact on supply chains. A recent study found that 94% of Fortune 1000 companies experienced supply chain disruptions. A supply chain disruption occurs when there is an interruption in the normal steps of the manufacturing process. A supply chain is interconnected with many suppliers and distributors, and any failure or delay in one part of the supply chain network can have a big impact on others. While there is no way to fully guarantee there won’t be disruptions, you can prepare for when the time comes in several ways.
Firstly, create an emergency plan that includes other ways to obtain products and move inventory, if that is necessary. Consider developing relationships with backup suppliers. You should also consider diversifying your suppliers, such as different areas in the world.
You should also consider having extra inventory on hand to help mitigate disruptions as they occur. These items should be the products that are the most in-demand and necessary to produce those products. While this step may require spending more money on warehouse space, it could be worth the expense if you face a disruption. Finally, remember to set aside an emergency fund if sales are affected by a disruption.
Check out the accompanying resource below, it provides even more tips on how to mitigate supply chain disruptions.
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