The world we live in today is very different from what it was a year ago. We’ve been forced to find new ways to safely work and interact with other people and within our environments. Many companies have had to alter the way they do business to remain effective and still be safe. When it comes to running your business today, your supply chain is crucial to success, and making sure it’s resilient is a must.
We chatted with Lisa Anderson, President of LMA Consulting Group, and a supply chain expert, about what manufacturers should be thinking about going into 2021 and how they can develop greater resiliency. We’ll list out some simple starting points below, but it’s important to remember that during these times, planning may involve thinking shorter term.
“It doesn’t mean that every solution has to last 10 years because who knows what’s going to happen in 10 years. Clients that are smart are looking at strategy for the next year,” she says. “Then you continue to adjust based on what’s available to you.”
Here are five ways to boost your supply chain and strengthen resilience.
1. Multiple Suppliers
Though it might have been deemed risky or an unnecessary expense before the pandemic, it is more important than ever to have multiple suppliers as a cost of doing business. Make sure you have a few different suppliers for the products and the supplies that you need to keep operating and to meeting the needs of customers, even though you might be operating with fewer supplies than you normally do.
2. Network Diversification
Another thing to consider is diversifying your networks. Let’s say, before the pandemic and subsequent supply shortage, you only ever bought a specific product from one seller in a very specific area, you may need to diversify this supply in order to keep product coming out and to ensure you have the supplies you need. Diversifying is going to help you to make sure you always have the supplies you need and that you are not going to be dealing with shortages that could have been avoided.
Though it might be more cost-effective to buy products from overseas in countries such as China, it may be more beneficial to buy your products from closer locations so you can keep pumping out your end product and even shorten the shipping time. Looking for places that might be a little more expensive but that are closer can cut the time that it takes to get those crucial supplies and to get back to work.
According to Anderson, “Manufacturers are taking action to nearshore. They’re either reshoring or actively planning to reshore. They’ve realized with the pandemic that not only is their supply chain too lengthy, it doesn’t allow them to be as resilient as they need to be in today’s environment, but they didn’t really have adequate backup sources of supply and they weren’t prepared enough to be agile… and it has forced them to do something that they were already leaning towards doing anyway.”
4. Clear Communication and Relationships with Suppliers
Your suppliers are going to, most likely, to work with those buyers that they know are going to consistently purchase from them and are going to help keep their business going as well. During times such as these it is not only the producers that are having a hard time, but also suppliers. You should be working to foster those relationships with your suppliers so that they are more likely to make sure you have what you need when you need it.
This is perhaps the most important factor to keep in mind. Being flexible with your supply chain will help you to make sure you have the supplies and suppliers that you need. Though it is always more comfortable to buy from the same supplier every time, you might have to try new things and be more flexible with your supply chain and planning.
Supply chains and supply chain resilience are some of the most important things when it comes to the overall success of a business. Knowing what you need, where to get it, and how to consistently keep those supplies coming is a must. In 2020, we learned that companies that were more creative and able to pivot were the most successful. Despite the uncertainty, your supply chain does not have to dry up. And from the looks of it, we’re on the brink of a real uptick in the industry.
“The smartest people right now are preparing for a resurgence,” says Anderson.