How to avoid supply chain disruptions in the future

How to avoid supply chain disruptions in the future

Blog Article

This article explains a few strategies to reduce and steer clear of supply chain disruptions. Find more here.

To avoid taking on costs, various businesses start thinking about alternative roads. For instance, due to long delays at major worldwide ports in some African states, some companies urge shippers to build up new tracks in addition to old-fashioned paths. This plan identifies and utilises other lesser-used ports. In place of relying on just one major port, once the delivery company notice heavy traffic, they redirect items to more efficient ports across the coastline and then transport them inland via rail or road. In accordance with maritime experts, this strategy has many advantages not merely in alleviating stress on overrun hubs, but also in the economic growth of emerging areas. Company leaders like AD Ports Group CEO may likely trust this view.

In supply chain management, interruption within a route of a given transport mode can somewhat impact the entire supply chain and, often times, even bring it to a halt. As such, business leaders like P&O Ferries CEO and Maersk CEO work hard to add flexibility within the mode of transport they rely on in a proactive way. As an example, some companies utilise a flexible logistics strategy that depends on multiple modes of transportation. They encourage their logistic partners to mix up their mode of transport to add all modes: vehicles, trains, motorcycles, bicycles, vessels and also helicopters. Investing in multimodal transport practices such as a combination of rail, road and maritime transport and even considering different geographical entry points minimises the vulnerabilities and dangers associated with depending on one mode.

Having a robust supply chain strategy will make businesses more resilient to supply-chain disruptions. There are two main forms of supply management dilemmas: the very first is due to the supplier side, specifically supplier selection, supplier relationship, supply planning, transportation and logistics. The second one deals with demand management issues. They are dilemmas linked to product launch, manufacturer product line management, demand planning, product rates and advertising preparation. So, what common methods can businesses adopt to enhance their capability to maintain their operations each time a major interruption hits? Based on a recent research, two methods are increasingly showing to be effective when a interruption occurs. The first one is referred to as a flexible supply base, while the second one is known as economic supply incentives. Although many on the market would contend that sourcing from a sole supplier cuts costs, it may cause issues as demand fluctuates or when it comes to a disruption. Thus, depending on multiple suppliers can alleviate the risk associated with single sourcing. On the other hand, economic supply incentives work whenever buyer provides incentives to induce more suppliers to enter the industry. The buyer will have more freedom in this way by moving production among suppliers, particularly in markets where there exists a limited amount of suppliers.