You’ve made it through the pandemic, reopened your locations, and re-hired staff. Now you’re faced with another problem; Supply Chain Disruption. Deliveries are not being made on time and it’s squeezing your inventory affecting your ability to meet demand. Just when we thought we were headed back to normal, the labor shortage and slow reopening of the economy is wreaking havoc on the global supply chain and driving inflation prices higher. So how do you overcome the challenges brought on by Supply Chain Disruption? Here are 6 tips to keep you and your team ahead of the game.
Don’t Rely on One Supplier
From environmental disasters to political fallout, many factors can destabilize your supply chain overnight. The worst thing you can do is rely on one major supplier for your key inventory pieces. Companies should have at least two backup suppliers to mitigate the risk of your primary vendor failing to deliver. Even if your secondary supplier operates within a higher cost margin, it’s worth paying higher for needed inventory or product than losing customers and business.
Be Prepared to Visit Your Local Grocer
During the shutdown consumers shifted from eating out to eating at home. This forced suppliers to reallocate resources to grocery stores. Since restaurants have opened, customers have flocked back to dining out with suppliers scrambling to play catch-up. While restaurants may be facing a supply shortage, grocery stores are still well stocked. In a bind, companies can send purchasers to local markets for necessary supplies.
Restaurants aren’t the only industry facing a supply chain disruption. Some companies are even reporting a shortage of paper products. Suppliers are having difficulty retaining workers due to unemployment benefits and the slow opening of child care facilities and schools. This has caused the delivery of all goods to slow down, back logging suppliers and overwhelming the supply chain. Companies are going to need to continue to be creative to meet customer expectations.
Simplify Your Menu
Chicken has been a hot topic this summer as it continues to be on high-demand across the U.S. launching restaurants into the ever famous “chicken wars” and pushing brands to experiment with their recipes. Unfortunately, chicken has not been exempt from the supply chain disruption, and many companies are having issues getting their chicken delivered. To combat supply shortages, restaurants are eliminating items they can’t guarantee will be available. Training workers to push slower moving products, promoting items that are available, and creating new menu items based on availability are all ways restaurants are rallying to meet customer demand.
Invest in the Right Tools
The best way to overcome supply chain disruption is to stay ahead of the supply shortages. A robust inventory management system can connect you to your suppliers or production warehouse providing real-time views of inventory levels, supplier performance, and supply chain management. With this information you can plan ahead and eliminate the possibility of disappointing customers by not being able to deliver desired products or services.
Automate Your Manual Processes
If you’re business processes are not coherent, you risk important details falling through the cracks. From purchasing to accounts payable, you need an integrated solution to help your team stay organized, identify preferred suppliers, best prices, and oversee compliance among your vendors. If you’re currently managing your business processes manually, paper-based, and in-house, consider to switching to a software provider that can automate your processes, or work with an outsourcing provider who has expertise in procure-to-pay solutions.
Manage Your Cash Flow
Cash flow isn’t just an important measurement to determine the success of your business, it’s essential for forecasting your survival should a disruption take place. How long can you sustain without product delivery? Do you have enough cash flow to acquire backup inventory? How much will it cost you to lose customers if you can’t sell a product due to supply chain disruption?
A strong understanding of your cash flow and the ability to manage your cash expertly will ensure you stay in business when others can’t.
Supply Chain Disruption can wreak havoc on businesses who are unprepared to meet the challenge. Companies need to have a strong backup plan to persevere though product shortages and rising prices. Building relationships with backup suppliers and local providers ensures you’ll still be able to receive necessary delivers. Investing in the right tools can help you plan for future disruptions, and outsourcing to supply chain management experts will put you and your team on track to overcome the challenges ahead.