The All-New AIM: Intelligent Forecasting + Inventory Planning

Managing a Crisis in Your Supply Chain

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Disaster can happen to a business through both natural and man-made crisis. Whether you are struck by a climatic, natural or sabotage event, the key to dealing with any disaster is preparedness.

Even when you prepare for all eventualities, prevention is not always guaranteed but preparedness is the best offensive for dealing with a crisis. So, what are some of the factors to help stop a crisis or disaster disrupting your supply chain operations?

Manage the unpredictability of demand

Disaster strikes with little warning and can damage logistics infrastructure. Its sudden occurrence can cause short lead times, so it is imperative to have the necessary resources available to implement a disaster management plan. Resources such as the right technology, trained personnel and transportation capacity help to facilitate an organised and coordinated approach.

Ensure you have a true picture of all your supply chain activities and flag areas that may be vulnerable if disaster were to strike any part of the supply chain. This includes suppliers of inventory stock, shipping and trucking routes that could potentially be affected by adverse weather conditions or natural disasters.

A prime advantage of maintaining strong supplier partnerships is the flexibility they can provide when times get tough. Supply chain partners will have a common interest in assisting you if needed.

Prioritise suppliers

If an important supplier’s’ ability to deliver is affected for days, or even weeks, do you have sufficient access to inventory stock to keep the business running smoothly? What systems can you put in place to ensure your operations remain unaffected by even the worst challenges thrown up?

Identify and make a list of all your suppliers, the services and inventory stock they provide to your organisation as well as their geographic locations. Identify potential threats that could affect different suppliers. For example, are they in a geographical location that often encounters floods, hurricanes or droughts?

Likewise, determine if the inventory stock sourced from an individual supplier will be in higher that normal demand if a crisis was to occur?

Establishing good relationships with suppliers means you will be better positioned to react quickly if there is a need to reroute or expedite deliveries, switch transport methods or place a temporarily hold on a shipment to avoid the risk of damage or loss of inventory stock.

Plan to be flexible

Organisations often face their greatest challenges when trying to adhere to a predetermined plan. As much as disaster planning will attempt to overcome all possibilities, disasters, if nothing else, are unpredictable. Therefore, it is imperative that any crisis plan has a degree of flexibility, so you can respond to new challenges as they arise.

A predetermined solution is not always the most viable approach when the unexpected occurs. It may be necessary to consider alternatives to keep shipments moving or dynamically routing vehicles if roads are closed.

In addition, the business may need to adapt operating hours and employ extra labour resources to ensure ongoing operations.

Engage the knowledge of your transport and logistics service providers who have experience managing exceptions. They can help you ramp up production, find capacity elsewhere, or explore options for rerouting shipments and expedite transportation to meet increased demand.

Communicate effectively

Following a disaster of any kind, an organised and coordinated approach is always the best approach. Maintain open lines of communication between internal departments and extended supply chain partners to ensure everyone is working with the same information.

Establish planning teams that engage all functional activities and who are directly responsible for creating a business continuity plan. Identify all possible disruptions to the company’s operations and determine how to quickly address immediate issues and any small disruptions that may escalate.

Appoint a single spokesperson to be the voice of your organisation to ensure a consistent response to the crisis.

Maintain complete transparency

Important at any time, transparency is even more critical during a crisis. Ensure all customers that will be affected by shortages or delays are kept informed.

Because there can be considerable fluctuations of supply and demand during emergencies and disasters, it is important for companies to communicate these variances to consumers.

Establish a single source of accurate data so that all supply chain partners are working with the same information. Software solutions can provide real-time access to inventory stock levels and has the functionality that enables suppliers, retailers and carriers to easily track, reroute or relocate inventory as necessary.

Critically, if the crisis or disaster is of your company’s own making, own up, take responsibility and fix the issue as quickly as possible.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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