The pandemic has generated a lot of disruption for manufacturers and consumers alike. Higher prices, labor shortages and supply chain bottlenecks are the more threatening issues that manufacturing companies have recently endured. Today, we’re going to focus on tips that we’ve learned over the years to help alleviate your supply chain challenges.
Tighten Up Your Communication
Let’s be candid about this: keeping a company running smoothly when there have been a host of interruptions in the supply chain can be a daunting task. In fact, the current global situation has forced larger organizations to entirely rethink their entire supply chain models. This is especially true for those that source overseas. For companies large, small, and in between, it takes intense cooperation and communication from all members of the extended team to stay on track. This includes everyone from operation managers and engineers, purchasing agents and the other hard-working folks on the front lines of this battle – either in the shop, or in the field.
Maintain You Inventories
Clearly, the primary goal is to make sure that ample inventories of all supplies are maintained. This starts with knowing what you have on hand, as well as consumption rates. Having an inventory tracking system in place, no matter how basic, will go a long way. The outdated thinking of, “We can get tomorrow what we run out of today,” no longer applies. In addition to support tools, you must employ longer range planning and forecasting methods. You need a very good understanding of what you’ll likely require weeks or months into the future, not just today or tomorrow.
Don’t Wait for that Alarming Supplier Email - Be Proactive!
Communication with key suppliers is imperative, particularly for critical products. Lead times now change often and quickly, and you must remain constantly informed with current information. Staying in touch with them lets you know if they are experiencing problems getting certain materials used in your production process.
Understanding new challenges as soon as they happen gives you time to shop out backup sources, (hopefully) before your supply runs dry. It also gives you a leg up on competitors, since suppliers typically take a few days to update all buyers about any major issues. Keeping a good relationship, with frequent emails or chats, could be the difference of you getting what you need in time, or running out for weeks. When it is available, STOCK UP! Even if it means extra carrying costs to hold what you require to function.
For items sourced overseas, insourcing may now be a viable option. While product cost from domestic suppliers might be higher, still do the math. The bigger equation may now work in your favor. Especially if it means getting what you need tomorrow, instead of next week, or who knows when. BTW, we’re not just talking about the cost of the product plus shipping! You must consider the cost of losing and replacing a customer if you can’t deliver.
Preparation Leads to Success
Of course, nobody has a crystal ball to accurately foretell the future. Either way, tightening up your communication overall and maintaining close relationships with your suppliers can only put you in a better position. Couple this with an improved understanding of your consumption and proactive procurement, and you will remain more than just viable. You’ll remain competitive. When the dust finally settles – your customers will remember you as the company that pulled through for them when others couldn’t. Rewards of increased loyalty and profits will be sure to follow.