The supply chain process continues to be hit by waves of disruptions and delays due to the after-effects of the Covid-19 pandemic. Manufacturing, construction, and retail are among the top three sectors most heavily affected by ongoing delays and disruptions. The current issues in the supply chain are only being exasperated by increasing costs to logistics, as well as rising fuel, labour, and trucking costs.
The growing and unpredictable customer demands have delivered a volatile market for suppliers facing trade restrictions and major staff shortages. Consistent supply chain disruption can have a profoundly negative impact on both the customer and the supplier and, in the worst-case scenario, lead to factory closures and unemployment.
For that reason, it’s more important now than ever to have a proper grasp of the supply chain process and be totally prepared for the inevitable disruptions and delays impacting the industry.
More and more consumers are beginning to turn to a Just-in-Time inventory and manufacturing model (JIT). Just-in-Time models typically involve companies working closely with their suppliers to only receive goods as and when they are required. In theory, JIT could be viewed as a major solution to the issues currently plaguing the supply chain process. Using this method often results in more profitability as there is always minimum inventory on hand to fulfil orders. This allows businesses to increase their levels of operational efficiency as well as reduce the amount of unused inventory.
While Just-in-Time models can offer substantial benefits to efficiency, they also come with their own set of risks, which at times, can outweigh the reward. JIT is collaborative in nature which means everyone involved in the supply chain process must cooperate for the model to deliver the best results. This means that if anyone at any stage of the supply chain fails to do their part or what’s required of them then the entire infrastructure could suffer.
Some organisations also struggle to meet the levels of demand that are associated with the model due to unexpected and large requests from customers. In some cases, the supplier may not be able to complete the requests instantly if they do not have the required inventory on hand. This could lead to disruptions in the supply chain and the production process. This is the only scenario where delays to the supply chain fall on the supplier.
For now, Just-in-Time models currently remain the preferred model in the supply chain process. There are a number of tips to take note of to help navigate the unpredictable nature of the model and reduce the risk of supply chain disruptions.
Tips for reducing delays
Set Contingency Plans for Vulnerabilities – Contingency plans should be put in place after identifying any vulnerabilities in your supply chain which could be impacted by disruptions or delays. This involves identifying the most important stages of your supply chain and researching suppliers to learn how often they encounter disruptions or if they are considered ‘high-risk’.
Prepare and Plan Effectively – Proper preparation and planning can help to develop a better understanding of the complications that can follow disruptions in the supply chain. Risk management strategies should also be implemented to prepare for risks and global events that could directly affect your organisation.
Increase Visibility- This will allow you to easily map your supplier’s supply chain and provide an opportunity to conduct some research. Increased visibility can allow you to learn more about the supplier’s processes as well as their working conditions and the impact that they may leave on the environment.
Build Solid Relations with Suppliers – Due to the collaborative nature of JIT models, it is imperative to build solid and productive relationships with your suppliers. Communication and transparency with your suppliers are integral components to solving potential delays and disruptions in the supply chain and can lead to a positive working relationship going forward.
Backup Inventory – With unpredictable customer orders that could come in at any moment, it is essential to have a healthy supply of backup inventory which can be used to fulfil orders. There should also be plenty of backup inventory in the lead-up to peak trading times like Christmas.
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