Supply Chain Inventory Management: Strengthen the Links to Reduce Costly Disruptions
Business runs on the principles of supply and demand. When you have enough supplies to meet demand, operations progress smoothly and your company establishes itself as a reliable partner with consumers and clients within your industry. Supply chain management is a difficult task. Numerous factors can impact the levels of supply, and when disruptions occur it can have significant consequences for your business.¬†
All it takes is one weak link in the chain to interrupt your supplies. In this post, business owners learn how to strengthen those links to avoid cutting into their profits as a result of supply chain interruptions.
Prepare Before Disaster, Not After
Natural disasters pose great risks to supply chains, both globally and regionally. For examples, a hurricane that severely damages the ports of New Orleans in the United States can have a ripple effect on trade and supply throughout the Caribbean, as well as North and South America. As The Wall Street Journal points out, your company can prepare for this type of scenario by moving finalized products or finishing products to manufacturing plants away from hurricane zones to prevent disruptions to the supply chain.
Design Sustainable Supply Networks
Forbes points out that disruptions can be avoided by designing networks that can be sustained through disruptions before they occur. By modeling your supply chain based upon an analysis of the sources of risk within your company, you can use software tools to help avoid disruptions. Companies such as EMSBarcode.com offer asset tracking software, inventory management software, and barcode scanners to help you build a supply chain that is sustainable during disruptions.
Include Risk Identification in Everyday Operations
Train managers within your business to visualize and understand the potential sources of risk that could impact individual departments and the business as a whole. If you keep your risk management processes within a different department, it is detached from the realities of your business and fails to address the everyday sources of risk, not to mention the long-term sources of risk. Placing risk management within individual departments generates a positive result and has the greatest impact.
Develop a Plan B
One of the best ways to avoid disruptions is to reduce the risk of disruption by carrying higher levels of supply throughout the year. Rather than operating on a fluid system in which supply arrives just in time to meet demand, your company can carry greater inventory to ensure that when disruptions occur you can carry on with business as usual.
Create an Agile Supply Chain
Last but not least, you can create a supply chain that is agile and capable of responding quickly to issues. The fashion industry is often cited as one of the most agile industries in terms of supply chain mobility. In fashion, supplies are moved quickly through the design process from raw materials to refined products that are ready to be sold on shelves in retail stores. This allows your company to react quickly to changes in seasonal demand and insulates against supply-chain risks.
Caroline Kang works as a part-time office assistant for a small auto parts supply company. Always looking for better ways to do her job, she likes to share what she finds by posting online. You can read her helpful articles on various websites and blogs today.