Today I want to talk to you about managing a healthy supply chain and dealing with disruptions. Let’s be honest managing a normal supply chain is chaotic enough under normal circumstances. Now imagine adding to the chaos natural disasters, product/production issues, delays with transportation, geopolitical instability or even a global pandemic.
2020 was a rude awakening for many organizations. Managing supply chain disruptions is crucial for distributors and manufacturers to begin with however, organizations that had the right infrastructure in place had a less challenging time adjusting.
Ask yourself the following 2 questions/If you answer no to these 2 questions you have some holes in your supply chain process that needs immediate attention.
Is your organization ready for the next black swan event?
Is your supply chain ready for the next downturn? Planned or unplanned disruptions? A example of a current event would be American companies seeing the serious risks of operating in Hong Kong as Chinese government tightens its grip on the global financial hub. That product your shipping from Chinese suppliers into Honk Kong is completely disrupted. So pay attention to drop shipping rules for economic nexus as well as whether sales tax is owed on freight, handling and delivery costs. Hawaii is no paradise for manufacturers. Their excise tax ranks #1 for all products and services including manufacturing equipment and raw materials.
If your answer was no to either question; I’d recommend you take a look at your PPT (People, Process, & Technology). Are your employees prepared or trained to handle swift changes? Is your process nimble enough to adjust over night? Did you have the right technology in place to help your people and process adapt?
I’m going to assume you have the right people in the right positions at your organization.
Next you want to take a look at your processes. Are they clearly defined for each department? Check with each department head and ask a series of questions to determine if you’re all on the same page. If not, there may be gaps in your process that you need to address. If you need help with defining clear responsibilities and eliminating redundancies you might need to hire an organization like PRH Consulting, Inc to help you with that.
Once you have all of your processes clearly defined- you want to make sure you have the right technology to keep things running seamlessly. The difference between surviving the next black swan event may come down to a reliable and intelligent ERP solution. You want an ERP system with smart forecasting capabilities to keep you ahead of all unforeseeable challenges. Many if not all of your clearly defined processes should be automated within your ERP system. Don’t make demand planning a significant task. Streamline it. And stop using spreadsheets! Why? Because at a minimum you run into the risks of Data accuracy and data control. You need to know what’s in stock, what’s on order, bill of material structure, who your suppliers are and the pricing associated with them. When you find the right tool, you’ll know because it will empower your employees to make quicker and better decisions and checks all the boxes we talked about.