The COVID-19 pandemic outbreak has created an alarming situation for the supply chain across the globe. Most of the supply chain organizations are in a state of shock due to the increased supply chai disruptions and reduced cash flow amid the outbreak. The best country sourcing organizations are constantly looking for ways to mitigate the supply chain risks. If you are also looking for risk mitigation ways, read through this context.
This context highlights five such ways you can mitigate the supply chain risks and weather the storm.
Assemble the Leadership Force
The very first thing sourcing contractors need to do is summon a team of purchasing, logistics, sales, production, and financing. This will help them align their efforts with the right operations and help them prioritize their tasks so that they can continue their supply chain operations in the course of the crisis and restart properly once the storm is over.
So, after the team is formed, the team leaders need to essentially meet regularly and revise the operational plans and review ongoing sales projects. The obvious benefit of doing this they will be able to sense any prior issue and adjust them beforehand. The leaders really need to put their employee and people at the center when organizing such meetings. Attending for daily meetings will effectively ensure that your company handles critical activities with ease.
Besides, the regular operational meetings also allows owners as well as employee to identify the potential risks associated with executing supply chain operations. When experienced people sit together, they usually come up with effective solutions. Therefore, attending regular meetings can be considered as an act of balancing rapid-decision-making capability with a smoothly flowing supply chain cycle for the strategic sourcing companies.
Determine Product’s Demand at Every Level
As you are aware of the ever-changing demands of the customers, you need to keep up with their requirements. To make this happen, you need to have employees who have direct contact with your potential customers, or at least are updated with their needs. To determine the needs of the customers is an important task and it should be done with honesty to ensure the growth of your organization.
When you will understand what your customer expects from you, you will be able to create a forecast plan that will reduce the supply chain disruption. Doing this correctly will also keep you informed about the inventory purchases and give you a forecast of the cash flow.
Another eye-catching benefit of determining the product demand level is you can simplify the range of product and buy the ones that your customer prefer. Instead of purchasing various versions of ten different things, you can focus on the inventory of five preferred products for your customer. This will not only help in cost reduction, but allow you to make a production plan. With this approach, you can prioritize the demanding products, while putting aside the ones that are less demanding.
Examine Inbound Supply Chain Risks
Identification of risks associated with supply chain management is the next important step and should be done effectively. Let’s focus on the in-bound supply chain risk and look for ways to mitigate them.
- Risk of Sourcing with Key Suppliers- If the suppliers will be able to meet your requirements. If they will change their priority and change the lead time delays. If the suppliers take break from their work, will they have the same manufacturing mentality and same quality of products once they resume to work.
- Sourcing Contract Bargains- If the supply chain leaders need to renegotiate the terms. If they need to change the quantities and delays that were already discussed.
- Receiving and Storage- If they have enough staff to receive the shipment products. If they can handle materials coming from infection-prone zones or infected areas.
- Inbound Shipping and Transport- If current situation will cause delay in transportation. If they need to change the transport methods.
The supply chain leaders need to properly examine these conditions and find a proper answer to these questions before even finalizing the contract with a supplier. Admitting these issues beforehand will help them to identify any problem and weather the storm with ease.
Examine Outbound Supply Chain Risks
After you have carefully examined the inbound risks, you need to analyze the outbound risks. So, let’s look at the outbound issues you need to address:
- Warehousing- If the strategic sourcing companies have adequate storage capacity. If the organizations have a risk of running out amid the pandemic outbreak.
- Distribution mode- This is mainly for the B2B organizations. The leaders of such organization need to make sure if they are directly able to sell products to their customers.
- Packaging- If they need to change the safety guidelines in order to adapt to new packaging ideas.
- Outbound Shipping and Transport- If they can change the transportation mode to speed up their shipments. If they can effectively send the products to customers. if they have enough delivery drivers to deliver products.
You can try solving these questions. You can look for new methods and implement them to solve these issues. Make sure you have answer to all these questions before you sign contract with suppliers. This can be an effective way of handling supply chain management issues.
Use Automated Tools to Improve Supply Chain Operations
The implementation of automated tools like Artificial Intelligence and Internet of Things tools aids in improving the credibility by checking the profit margin of supply chain closely. Nowadays, most of the organizations among a wide array of industries requires the department’s management to approve requests of various financial issues. The managers must properly examine the vet suppliers, then monitor their tasks, and make various other critical decisions through these tools. These informed decisions, when backed up with solid and reliable data, helps in enhancing credibility. Moreover, the department managers are capable of making superior and informed decisions with the help of these tools.
Follow these steps and see yourself in the list of the best country sourcing products to the customers worldwide. Communicate externally and internally and address problems while positioning your organization in the market amid the storm.