Rethink your supply chain

Supply chain disruption has been an ongoing issue since the pandemic.

The COVID-19 pandemic created challenges and disruption for businesses across the world. Now that most parts of the world are open and trying to get back to normal, demand is increasing and supply chain disruption has become a serious problem for many businesses. A typical supply chain flow might start with raw materials, move through the supplier, the manufacturer, the distributor, and then the retailer, before eventually reaching the customer.

Pre-pandemic, many businesses embraced globalisation and sourced their materials from suppliers across the world. Due to the various lockdowns during the pandemic, many suppliers are dealing with backlogs of orders and new supplies are harder to come by. An example of this is the current bottleneck with regard to semi-conductors which is affecting the electronics and auto industries, whereby manufacturers simply cannot get hold of the electronic components that they need to build their products.

Businesses can manage disruption to their supply chain by preparing for unforeseen events and having a contingency plan in case of emergency. It can also be helpful to audit your supply chain to identify any vulnerabilities.

For example, you may depend on one supplier for a key component. You can manage this risk by sourcing these components from multiple suppliers. Therefore, if one supplier goes down, you have others that you can rely on.

Depending on your business, it may also be worth building up an inventory of spare supplies in case of emergency. This can be expensive and holding extra stock may not always be a great idea if you operate in a sector of the market where products go out of date relatively quickly. However, depending on the type of business that your run, it may work for you.

It may also be worth looking at the geographic location of your suppliers. If they are located in a country on the other side of the world, it may be a good idea to find an equivalent supplier here in the UK, who can supply your business easier and without the risk of long-haul travel disruptions. Supply chain disruption cannot be prevented, but if managed effectively, any unforeseen or unpredictable risks to your business can be minimised.