How To Beat Supply Chain Challenges The Zip Way!
This generation is lucky to be enjoying advancement in technology and the internet which paved the way to beat supply chain challenges in a global scale. Yes, technology has rapidly changed the pace of logistics and how it combat problems. However, it would be naive to claim that the challenges of supply chain management have decreased compared to past times.
On the other hand, the globalization, and then trade sanctions, Brexit, eCommerce revolution, pandemic – these are all factors that over-complicate the already complex supply chain management, especially for small and medium companies lacking the resources that giant companies have.
Awareness of supply chain problems can save you a lot of time and money if you’re entering the game just now. Even if the pandemic ends tomorrow, it’ll take time for the society and economy to stabilize. You would have to build a business so robust that nothing can topple it to the ground. As a matter of fact, even at perfectly prosperous times, supply chain issues would still exist.
What Disrupts a Supply Chain?
Disruptions in the supply chain can happen at any point in time – and more so in a pandemic. This refers to a major breakdown in the production or distribution of products in a supply chain.
If one chain gets damaged and remains unresolved – the rest may die with it. That is why it’s important to identify supply chain problems at an earlier stage before it gets even worse and spoil the party.
A supply chain breakdown can occur for one or many reasons such as fire, machinery breakdown, pandemics, natural disasters, logistical issues, product issues, or an unexpected surge in capacity. This may lead to reduced productivity, increased expenditure, customer and employee dissatisfaction etc.
Supply chains lack the resilience required and are breaking down in the case of multi-country lockdowns and disruptions. Adding to this they are also becoming costlier and are have reduced sustainability.
Not all supply chain disruptions are classified as equal. Usually, all supply chain disruptions are measured based on their probability and severity. This varies based on the chain and the industry it operates in.
Common Supply Chain Challenges
The focus should really pivot towards identifying the different supply chain challenges your company faces and not turn a blind eye to them. Then it’s imperative to work on fixing them. Some of these challenges will persist but if you learn to keep them under control, you’ll minimize the damage. Here are some of the top and most common supply chain problems today:
Excess in Stocks or Inventory
Excess in stocks or inventory is one of the most common supply chain issues. But with product philanthropy, you can turn a losing situation into one that benefits both those in need and your bottom line. In other words, by donating your excess inventory, you can both help charities in need while taking advantage of a little-known tax break.
You can seek out free help from a gifts-in-kind organization. The way it works is that a corporation ships their items to a gifts-in-kind organization. In turn, charitable access as much of the gifts-in-kind’s available products as they want, picking up the cost of shipping the items to them.
The only stipulation is that the charitable groups have to either use the items themselves or give it to those in need in their community. They are not permitted to sell it.
COVID-19’s outbreak gravely impacted global supply chains across industries especially in 2020 but it’s still affecting everyone in a global scale. The scale and the impact of global pandemics and public health crises can be brutal on supply chains.
Trouble in paradise? Disasters would often strike without a warning and supply chains can be disrupted just as easily. Natural disasters like tsunamis, hurricanes, wildfires, and floods highlight supply chain blind spots in the overall supply chain framework.
Failure in Logistics
Logistics trouble is inevitable even in the best conditions, that is why you have to be combat-ready for supply chain problems along the way.
In a globalized world, trade has made it increasingly common for businesses to include international suppliers in their supply chains. While this largely increases business opportunities it also puts weight on international and domestic transport networks leading to a choked or delayed logistical outcome.
Supply chains can compound logistical problems with other uncertain variables. A natural disaster can affect the transportation of goods and services in an affected area or a country can go into lockdowns making it difficult for carriers to deliver goods by land, air, or sea even for vital products in the case of a pandemic.
Product Issues or Defects
Maintain the consistency in the quality of your products is important for any business. With that being said, quality assurance and management is a crucial element in any supply chain management.
An issue in the product can occur at any stage throughout the supply chain and so can push the business into delays of pushing out the final product. Businesses don’t want to sell mediocre goods and delay shipments due to a defective product. Hence ensuring good quality assurance in the supply chain is essential.
Lack of Communication
The most common supply chain issue I see time and time again is miscommunication or misunderstanding of requirements leading to client needs not being met. This can be solved by providing a written specification or work instruction that both client and supplier have read and agreed to ahead of time.
The specification should state, in clear language, what the client requires and the supplier should be given the opportunity to provide feedback or raise questions on its content prior to order placement.
We have seen a significant reduction in errors and issues with our supply chain since implementing specifications at the quotation stage.
Lack of Shipping Capacity
Shipping capacity, especially during surge periods, can bring supply chains to a grinding halt. Many industries are currently feeling the pain of disruption caused by capacity shortages in last-mile delivery as the global pandemic has created a surge in online ordering and contact-less delivery requests.
It’s important that businesses create plans in advance of capacity challenges to ensure there is no disruption to their supply chains. Crowd-sourced solutions are an effective way to address capacity shortages, as they allow businesses to quickly scale up their capabilities quickly and seamlessly with networks of vetted, independent professionals.
Businesses should look for a robust logistics partner like Zip Logistics that thoroughly vets and background checks all referred contractors and supports projects with comprehensive insurance coverage, load tracking, proof of delivery, and billing support.
These on-demand solutions can provide essential services and keep supply chains moving, even when traditional carriers are stretched.
Constant Evolution and Dynamics
Logistics and the supply chain constantly change shape and evolve over time. Advanced technologies certainly help to improve the modern supply chain. It is critical that we are not only keeping up but that we are staying ahead of the curve. We solve this problem by finding scalable solutions that allow flexibility for anything the industry throws at us.
For instance, Ro-Ro, or Roll-on Roll-off, is the traditional method of shipping finished vehicles. This method can be challenging due to time, shipment, and volume constraints. Instead, we adopted containerized shipping which broadened our reach in the market and has allowed us to service more lanes safely and at increased efficiency.
Demand on Speed
Speed is now a very important consideration when choosing a logistics company. We often see customers focus closely on the amount of time their shipments are processed through our warehouse and logistics centers, instead of the entire supply chain.
Our experience is that to improve speed to market it is imperative that one takes a holistic view of the entire supply from origin to the goods final destination. In our experience, with some process mapping, along with some critical analysis of the timelines, we can usually find a day or two in the supply chain long before the goods arrive at our facility to improve this speed.
Lack of Data Integrity
A common supply chain challenge is a lack of data integrity and the solution is now focused on blockchain technology. Enabling this market-leading technology seamlessly enables the flow of goods, information, and fees along any supply chain. It establishes accuracy, transparency, auditability, and trusted facts which enable smart contracts to automate processes to improve efficiencies and reduce costs.
Whether it is for frictionless trade finance, factoring, invoicing, automated payments, or other multi-party information exchange, businesses need to know that they are reducing risk, reducing administrative processes, and reducing costs with the best technology on the market.
How to Solve Supply Chain Problems
Planning is awesome, thinking long-term is great but unless you’re a soothsayer or can predict the future exactly you need measures to deal with failures too. Let’s take a look at some methods for efficient crisis management solutions in the event you’re in a pickle with your supply chains.
Communication is Key!
Communicate with your customers, suppliers, and distributors. It pays to continuously plan for your workforce safety and productivity.
Dive In Data
If you have data and metrics available at your disposal, you can use them to maximize transparency across channels in your disrupted supply chain. This way, you can isolate any part prone to breakdown, and then replace or renew it accordingly.
Use data to also analyze your footing in demand, existing inventory, warehouse capacity, supply, and finances across your organization.
In the event of any disruption prioritizing decisions is key. With limited resources at your disposal ensure that you can estimate the timing of all variables which can help you return to production.
You also need a dedicated planning and execution team that can operate responses quickly, re-allocate resources where needed and communicate effectively. By also running simulations you can get actionable insights that will identify areas of shortage and will let you optimize resources accordingly.
Be Agile and Responsive!
While so many things can go wrong, you can still create a robust framework to beat supply chain problems.
Supply chain operations are a tricky thing owing to their interdependent nature. It’s easy to take it for granted when things are going smoothly. However, companies today have the opportunity to use this transition period to oversee their supply chain shortcomings and develop brand new agile and responsive chains.
These disruptions are a great way to discover areas of growth, innovation, and investments. It will push companies to evolve their supply chain structures and reposition for the eventual economic rebound – and Zip Logistics can help you keep up with the disruptive times.