Most supply chain managers fear that their goods will fail to reach their destination on time. This occurs when there is a supply chain disruption. A supply chain is a network of activities involving people, organizations, and processes that coordinates to ensure goods are distributed successfully from the supplier to the final customer (Meyer, n.d.). Supply chain disruption occurs when a crisis such as pandemics and natural disasters like the Nuclear disaster in the Daiichi Nuclear Power plant inhibit the movement of goods across the supply chains (Meyer, n.d.). During the Covid-19 surge, most supply chain activities were challenged, and delays in distribution and supply occurred. Cargos were restrained from movement, and businesses from various sectors struggled with empty orders and the satisfaction of their customers. Most managers were challenged and had to adopt various strategies to turn the supply chain disruptions into a meaningful change. These supply chain disruptions are inevitable. When they occur, supply chain players should invest in the right technologies, diversify their suppliers, incorporate risk management strategies and emergency tools, and partner with supply chain experts. If supply chain disruption has already occurred, supply chain players should communicate with the customers, assess the inventory available to keep production running, and locate various logistic flexibilities.
Inventing the right technology is a suitable strategy for mitigating supply chain disruptions. Supply chain players may invest in inventory management software. This will integrate producers’ data, suppliers, distributors, and customers in inventory control. Data can be easily accessed when a crisis occurs, and a course of action can be adopted (Ingram & Evans, 2021). Also, suitable supply chain software will help companies identify inventory levels at their vendors and raw materials available at their suppliers. Suppliers can easily detect any change when information is stored together and save volatility in the entire supply chain.
Diversifying suppliers is also a suitable strategy for avoiding supply chain disruptions. Diversifying suppliers entails establishing supply chain contracts with several suppliers and distributors to minimize risks in case of challenges with production with one of their suppliers (Magableh, 2021). Like other investment portfolios, diversification of suppliers is important as it will hedge the supply chain from disruptions, and companies will have access to goods from other supplies base amidst disruption. For example, companies can sign contracts with several suppliers from different countries to ensure that in case of a pandemic or a natural disaster strike a certain country, they can have a flow of goods from suppliers in other countries not affected by pandemics. Diversification is, therefore, a suitable strategy for avoiding supply chains disruptions.
Besides diversification, businesses should incorporate risk management strategies and emergency tools to avoid supply chain disruptions. Risk management strategies and emergency plans will enable a company to plan out mitigation plans (Pujawan & Bah, 2021). For example, a company can integrate AI-enabled mapping in its systems to assess the entire supply chain and detect any errors or changes that may disrupt the supply chain (Meyer, n.d.). Besides artificial intelligence tools, social media analytics can act as predictive tools and detect shortages and disruptions in the supply chains. A company will utilize information collected through social media analytics and utilize the information to hedge the company from further supply chain disruptions.
Supply chain logistic experts are also vital in mitigating supply chain disruptions. Companies should consult logistic experts to find solutions for supply chain disruptions. Logistic experts have a diverse knowledge relating to supply chains, and they will assess the supply chains, detect inventory sourcing changes, and provide suitable recommendations. More so, they will help companies to identify alternative solutions and hedge against disruptions. For example, Easyship company partnered with BigCommerce to provide logistic guidance during supply chain disruptions (Meyer, n.d.). Companies should therefore seek partnership with logistic experts for support during disruptions.
When supply chain disruptions have occurred, companies should communicate with their customers. Communicating with the customers will involve informing the customers about disruptions in the supply chain so that there is no market suspicion when a delayed supply of goods occurs. Customers are likely to understand and enable the business to maintain its market share and avoid losing potential customers. When customers are always informed, they will be aware that disruptions are likely to happen due to imperfections in the market and uncontrollable disasters and pandemics. Communication should be consistent throughout the supply chains to ensure that all players are informed about any disruption in the supply chain, and preparations are organized before the disruptions.
Besides communicating with customers, companies can assess the available inventories. Inventory management is important to determine if the available inventories can keep the production running. Customers will continue demanding goods even in case of disruptions, and if there is a shortage, a market crisis may occur. Estimating the available inventory will help the company plan and satisfy the demand with what is available. To match the customer’s demand, a company may pivot its products and survive the disruption period. Thus, assessing available inventories is a suitable strategy for dealing with supply chain disruptions.
Companies should also seek logistic flexibilities to seal against supply chain disruptions. Adopting logistic flexibilities will enable an organization to respond promptly to their customers’ needs in the face of challenges (Yu et al., 2017). A company cannot watch a decrease in order supplies without adopting a solution and catering to customers’ demands. Supply disruptions call for companies to identify other distribution methods, suppliers, and transportation methods to solve the supply disruptions. This is important because supply chain disruption may last longer than expected, and if no prompt actions are adopted, a company may lose its revenue and profits. Seeking logistic alternatives can help a company to cope with supply chain disruptions. Other methods of dealing with supply disruptions include studying buyers’ behaviors, optimizing production and distribution, and finally assessing cash flow.
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When businesses’ supply chains operate normally, it is possible to avoid planning for future strategies to deal with supply chain disruptions. Supply chain disruption occurs due to natural disasters, pandemics, cyber-attacks, and unpredictable price fluctuations. These disruptions are inevitable, but if a business diversifies its supplies, invests in suitable technology, incorporates risk management strategies, and partners with logistic partners, it can hedge itself from supply chain disruptions. In case they occur, a business can communicate with their customers and inform them of the current situation in the market and estimate the available inventories to ensure the continuous running of a business. Most importantly, a company should determine its logistic flexibilities and cope with supply chain disruptions while satisfying its customers’ needs. Adopting these recommendations will help companies reduce and solve their supply chain disruptions.
Ingram, T., & Evans, M. (2021). 5 Steps To Protect Your Business From Supply Chain Disruptions. Forbes. Retrieved 20 April 2022, from https://www.forbes.com/sites/allbusiness/2021/06/29/5-steps-to-protect-your-business-from-supply-chain-disruptions/?sh=2ecd52203455.
Magableh, G. (2021). Supply Chains and the COVID‐19 Pandemic: A Comprehensive Framework. European Management Review, 18(3), 363-382. https://doi.org/10.1111/emre.12449
Meyer, S. 7 Steps for Minimizing Supply Chain Disruptions + Prevention Tips. The BigCommerce Blog. Retrieved 20 April 2022, from https://www.bigcommerce.com/blog/supply-chain-disruptions/#what-is-a-supply-chain-disruption.
Pujawan, I., & Bah, A. (2021). Supply chains under COVID-19 disruptions: literature review and research agenda. Supply Chain Forum: An International Journal, 23(1), 81-95. https://doi.org/10.1080/16258312.2021.1932568
Yu, K., Cadeaux, J., & Song, H. (2017). Flexibility and quality in logistics and relationships. Industrial Marketing Management, 62, 211-225. https://doi.org/10.1016/j.indmarman.2016.09.004