No business is immune to supply chain disruptions. An unexpected event can bring even the largest and most well-run organizations down. That’s why companies are constantly searching for ways to mitigate supply chain disruptions in today’s business world.
Disruptions can come in many forms – natural disasters, political instability, labor strikes and more. It can be costly if your business is not prepared for these disruptions. This article discusses risk assessment and advanced supply chain strategies to help your business navigate potential disruptions.
Risk Assessment in Supply Chains
The first step in mitigating supply chain disruptions is to assess the risks. What supply chain risks does your business face? What are the chances of those risks happening? And what would be the impact on your business if they did happen?
Here are a few examples:
- Vendor risk—What happens if your principal supplier goes out of business or cannot meet your demand?
- Transportation risk—What if there is a strike or an unexpected delay in shipping?
- Natural disaster risk—What if a hurricane, earthquake, or other natural disaster disrupts your supply chain?
How to Minimize Supply Chain Risks
To minimize supply chain risks, consider implementing some of the following strategies:
Diversify Suppliers—Don’t put all your eggs in one basket. To diversify your vendor network:
- Use requisitions to get quotes from new suppliers
- Add onshore vendors for items you currently source overseas
- Ask vendors if they can supply additional products.
For more flexibility, also consider using several transportation companies.
Eliminate Bottlenecks—Businesses need to have visibility in their supply chain so they can identify potential issues and take steps to avoid them. For example, consider arranging drop-shipments from vendors to consumers and directly contacting suppliers. To lower transportation expenses and lead times, consider gaining strategic suppliers closer to customers.
Make Investments—Investing in the latest technology and software can help businesses gain visibility into their supply chain, identify risks, and make real-time adjustments. This technology can also automate procedures and decrease costs. Investing in employees can help avoid labor shortages. Similarly, invest in employee training to empower your team and to ensure your team is prepared to handle supply chain disruptions. Invest in R&D to develop goods that are difficult to acquire elsewhere.
How Acumatica Can Help
Acumatica cloud enterprise resource planning (ERP) software allows you to monitor your supply chain in real-time, so you can quickly identify and react to potential disruptions. With Acumatica, you can:
- Automate and streamline business processes
- Gain visibility in every stage of the supply chain
- Analyze data to identify trends and make informed decisions
- Respond quickly to changes in demand
- Adjust plans on the fly to avoid disruptions
This is a tiny sample of what you can do to mitigate supply chain disruptions. By being proactive and taking steps to assess and minimize risks, you can protect your business from the adverse effects of disturbances.
Download this playbook to learn how supply chain disruptions can be overcome with Acumatica, a scalable and affordable cloud platform designed for growing businesses.