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There are many ways that supply chains can get disrupted: ships sink, get stuck, or face port logjams; cargo planes have to take longer routes because of restricted airspace; trucks face so much city congestion that millions of dollars are lost; freight trains get looted; and bicycle delivery workers deal with people stealing their bikes. Of course, there’s also COVID-19, the Great Resignation, tariffs, and all the other usual suspects.
It’s stressful, and that’s why today’s supply chain professionals — from the procurement officers negotiating prices to the warehouse workers who manage inventory and beyond — are heroes. You’re managing the challenges so that we can get the goods.
Here are 12 actionable steps to take to ensure your supply chain is bulletproof.
1. Build Collaborative Relationships with Vendors
When raw materials are skyrocketing and delays are stretching, it’s tempting to put the burden on the vendor. Not only does that not change the reality of the situation, but making unrealistic demands, unleashing your frustration on someone who is likely already stressed, and taking retaliatory actions for issues that are not the vendor’s fault can sour your relationship with the vendor. They may even decide to drop your business in favor of another.
Instead, work with your vendor toward common goals, a strategy that saved the Kellogg Company from experiencing further pain points during the pandemic. It’s also a tactic the startup Filti used, saying, “We have great relationships with our media supplier, our corrugate supplier, and every other supplier that we really depend on. We all mutually benefit by working hard to achieve the same common goal.”
2. Do Your Research
Building a symbiotic relationship with a vendor doesn’t mean not doing your due diligence. As ProPurchaser explained, suppliers will inform procurement officers when raw material costs go up, but they’re silent when these costs fall. It’s up to procurement professionals therefore to track the fluctuations and negotiate accordingly. ProPurchaser told us, “Sales reps actually like Silent Slopes because they get paid for closing. If price is an obstacle, they’ll be anxious to remove it. Arming sales reps with Silent Slopes allows them to champion your joint cause to their management team.”
3. Over-communicate
Communicate early and often. It’s easy to assume that everyone on your team and all of your vendors are fully aware of changes or know to continue with standard operating procedures during times of supply chain disruptions. While you shouldn’t inundate staff and vendors with messages, sending short, regular communications can build trust, help maintain morale and productivity, and refresh your team on basic policies and resources they may have forgotten about or don’t know exist.
When it comes to communication, documentation is key. Handbooks, online resources, and emails serve as valuable information that can be referred back to. However, depending on whom you want to reach and the context, instant messaging platforms, the telephone, and in-person meetings each have their place.
4. Invest in Supply Chain Visibility Tools
A shockingly low number of companies — 6% — indicate that they have complete visibility on their supply chains. Visibility has long been a challenge in supply chains because there are so many moving parts and gatekeepers working across different time zones. Cloud-based supply chain visibility software can provide real-time data that helps businesses improve efficiency, reduce cost, decrease the impact of disruptions, and increase transparency and trust.
Enterprise resource planning (ERP) is the main hub for operations, logistics, inventory, and operations. ERP systems have been around for a long time, so even if you already have one, it may be time for a new one that can integrate with the latest technology. [This checklist can help you determine if your ERP is performing to its fullest potential.]
A transportation management system (TMS) is a logistics tool that offers visibility over transportation. It can determine the best carriers, optimize routes, track shipments, perform audits, ensure deliveries are trade compliant, and provide KPIs. It can be used for both raw materials coming to the factory as well as finished products headed to the warehouse.
A warehouse management system (WMS) manages on-site products. The software provides an overview of inventory, organizes the warehouse and optimizes the space available, and helps manage order fulfillment.
5. Consider Additive Manufacturing
“When you talk about large supply chain disruptions such as a pandemic, 3D printing became very popular because the minimum requirement was a 3D model,” Greg Paulsen, director of application engineering at Xometry, recently told us. “If that 3D model is able to be generated — whether it’s for emergency personal protective equipment or a stopgap solution for a component that was sourced internationally — they could get near-immediate results.” [Xometry offers pricing, lead time, and DFM feedback through the Xometry Instant Quoting Engine.]
It’s no wonder the 3D printing market is expected to quadruple, reaching more than $50 billion by 2030. Even if you plan to continue with traditional manufacturing, it’s forward-thinking to research your additive manufacturing options now so you have a game plan in place should you need to pivot.
6. Micro-warehouse
While gigantic warehouses like the Boeing Everett Factory are the ones that make the headlines, having numerous small warehouses strategically situated at locations relevant to your production facility and to your clients could actually be more beneficial to running smooth operations. Micro warehouses also provide the opportunity to open customer fulfillment centers in cities, which translates to speedier delivery times.
7. Embrace Robotics
By 2030, it’s predicted that the global commercial warehouse robotics market will reach $51 billion. If you’re not taking advantage of robotics, you will likely not be able to keep up with your competitors.
Automation is not just a “nice to have” anymore; it’s a “must have,” Hanna Yanovsky, general manager of Caja Robotic, told Inbound Logistics.
8. Utilize Big Data Analytics
Digital tools like the ones mentioned above can gather and track data. Machine learning and predictive analytics take the guesswork out of forecasting consumer demand. According to a recent McKinsey survey, most companies today are using artificial intelligence (AI) to increase their revenue: “In supply-chain management, respondents often cite sales and demand forecasting and spend analytics as use cases that generate revenue.”
Fashion retailer H&M hired more than 200 data scientists so they could predict what they’ll need to restock and what the next big trend will be. Its competitor Zara, meanwhile, uses AI to not only predict style but also what colors and sizes will be most popular.
9. Don’t Forget About Customer Service
Part of bulletproofing your supply chain is retaining and growing your customer base, and that’s why, particularly amid product gaffes and supply chain hurdles, it’s important to have a high level of customer service.
Facing a shortage of delivery drivers, Domino’s got creative with a marketing gimmick to improve customer service by incentivizing pizza lovers to pick up their own pizza. Usually, customers tip pizza delivery drivers. Domino’s turned the tables and is now tipping online carryout customers.
“We’ve been very upfront with customers,” Michael Shaughnessy, senior vice president of operations at Balsam Brands, told Inbound Logistics, speaking of holiday logistics hurdles. “We want to make sure expectations are set and met.” The company provided product availability information on its website and, when inventory was depleted, suggestions for similar products.
When it comes to quality check failures and product recalls, it’s especially important to get in front of the situation. In our article “How to Survive a Product Recall,” suggestions include reaching out to customers, communicating openly, apologizing, and investigating the problem.
10. Stay Informed
Keep your ear out about anything that may impact supply chains. Subscribe to publications like the Thomas Industry Update newsletter and Inbound Logistics to get industry updates and thought leadership. It’s important to also stay up-to-date on current events and politics, since weather forecasts, inflation, tariffs, and other news can impact supply chains. Additionally, part of communicating with your staff, vendors, and customers is listening to any intel they may have.
11. Review and Perfect Procedures
Automate dates in your calendar to take time out on a regular basis to systematically review your supply chain. You will want to take this opportunity to conduct training to ensure everyone on your staff is following procedures correctly, is informed of any policy and compliance changes, and has a thorough knowledge of your product and service offerings. You’ll also want to perform an audit with your vendors to confirm they are following your company instructions as well as legal requirements.
You can use your software to analyze data to ensure every aspect of your supply chain is functioning at its optimal level. Take time to audit any machinery and technology you use to ensure it is in shape and that it is still competitive. Perform a deep dive into your company’s financials to see where your money can go further and if your budget may provide you with tools that can accelerate your business — keeping in mind that employees are your biggest asset and that investing in their education and salaries can benefit your company in the long run. And of course, look for common bottlenecks and find ways to clear them.
12. Stay Balanced
This checklist can help better manage disruptions, but supply chains can be unpredictable. Because of the global nature of supply chains — even if you manufacture in the U.S., raw materials and shipping products may come from oversea — it may sometimes feel all-consuming. But even heroes need rest.
It’s important to keep your work-life balance in check. 83% of U.S. workers face work-related stress, and this stress leads to missing work, which can cost businesses up to $300 billion a year. One study found that transportation workers are among the most likely to not sleep the recommended hours, which can lead to mistakes on the job. You cannot be your best at work when you are running on empty.
Spend time with your family and friends. Practice self-care by making meals with fresh, whole ingredients and by exercising regularly. Do the hobbies you love, and partake in new ones that will enrich your life and provide you with new skills. Travel — even if it’s just reading books that transport you. All of these things can inspire and motivate you in and out of work.
Image Credit: alphaspirit.it / Shutterstock.com
