101: Managing supply chain problems
As supply chain issues plague the economy, companies are searching for ways to keep business running as usual. Long wait times, lack of regular supplies, and a higher cost coming with extreme demand can cause a lot of chaos. Here are tips for dealing with supply chain issues, and how to prepare for the next time there are shortages.
Do not over invest. It might be tempting to make big purchases right now, especially if your warehouses are getting empty. But buying a lot of supply at jacked-up prices will likely just lead to more problems down the road. “When the supply shortages are resolved, you might end up with excess inventory that you paid a premium for,” Firas Kittaneh, co-founder of Amerisleep Mattress, told Forbes.com. “Instead, be mindful about getting just enough supply to minimize operational downtime.”
Identify risks in your operation. A lot of times, small businesses will assess their supply chain vulnerabilities based on what’s going on with their primary supplier. But it goes a lot deeper and delving into the firms that supply their suppliers and so on can help prevent problems in the future. “Once you’ve assessed your downstream exposure, you can start to identify new partners and geographies to build supply chain diversity and resilience,” Sean Laffere, managing director of Alvarez & Marsal in Houston, wrote on Inc.com.
With customer service, go above and beyond. While you might believe in your ability to get things done in the regular timeframe, it’s best to be completely up front and open with customers when their orders will likely be delayed. Simple things, like stock notifications for customers, go a long way. “The worst a business can do is to let customers guess or plan for product deliveries which won’t happen,” Simona Stan, professor of marketing at the University of Montana College of Business, told NerdWallet. “When in doubt, it’s better to underpromise.”
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