An erratic supply chain has replaced the previous standard. What happens when you add this uncertainty to the increased customer demand for cheaper pricing and same-day delivery, as well as worldwide inflation? Margin reduction and increasing competition are the results. Predictability is the key to winning this conflict.
The correct transportation management software solution helps to improve supply chain operations and cut expenses, whether it’s the provision of raw materials for production or last-mile delivery to the customer’s premises. Although it won’t resolve the problems with the world’s supply chains, this will undoubtedly help your business win the war for margins.
What is Supply Chain Disruption?
Consider the 400m (1300ft) long Ever Given cargo vessel that became trapped in the Suez Canal to better comprehend supply chain disruption. It gained attention due to the interruption of supply chain activities for a whole week, which resulted in an estimated loss of more than $50 billion. Not only were financial losses a worry, but also the broader effect on the model of the worldwide supply chain as a whole and the possibility of more disruptions.
The Suez Canal subsequently resumed its original shape once Ever Given was ultimately set free. What transpires, though, if there is no “quick fix”? What if large tractors and strong tugboats are unable to stop ongoing disturbances caused by global health, social, and economic factors?
A worldwide supply chain disruption can occur at any step along the way, from the start, where a scarcity of raw materials stops production lines, to the very end when a lack of local carriers for last-mile delivery can result in missing goods and disgruntled consumers
Why Does It Happen?
The pandemic is clearly not the main cause of the current problems with the world’s supply chains, but it may be seen as a trigger for those problems.
Demand from customers for shopping online and residential delivery skyrocketed during the lockout. One in three things will be bought online by 2026, putting more pressure on merchants to deliver goods faster and with fewer resources.
Online retailers who wish to prosper in the present economic climate must boost supply chain efficiency, reduce fulfillment costs, and boost consumer loyalty through quick and reliable last-mile delivery.
4 Solutions That May Prevent Supply Chain Disruption
As a retail business, you have a lot to deal with. When there is a disruption in the supply chain, you risk losing your reputation, clients, and income. Here are four tips that can help you prevent it.
Be Agile
The reality of today’s global supply chain must acknowledge disruption. This calls for adaptability grounded in real-time data, rapid assessments, and taking remedial action.
It is strongly advised to have a “backup plan” prepared so that supply chain interruptions have little impact on company outcomes. The information and options needed to make this happen can also be provided via transportation management software with AI-based analytics.
Create Alternatives
Extra precautions are necessary in uncertain times. It is necessary to think about alternative providers that can be relied upon in an emergency as previously dependable ones may not be able to supply.
Stockpiling raw materials and placing orders now for future needs can also support maintaining production in the face of supply chain interruptions. Similar to how many manufacturers are adopting lean manufacturing techniques, which focus output on real orders rather than maintaining inventory. Ensuring that the items are delivered on schedule necessitates early ordering.
Expand Your Communication Network
Unpredictability in the supply chain might make it difficult to set and adhere to delivery dates. Increasing customer communication and giving them real-time information on their shipments is an excellent method to tackle this.
The same is true for suppliers, who have a responsibility to inform merchants of their production capabilities and stock levels. Supply chain executives can predict delays accurately and take remedial action by combining current information with previous experience.
Make Your Supply Chain Predictable
Increasing your level of predictability is the greatest method to deal with an unpredictable supply chain. Obtain real-time information and suggestions for the best solutions. It is necessary to make use of the most recent technologies, such as machine learning and AI, and integrate them into a single delivery management platform.
Online merchants may beat global inflation, falling margins, and increasing expectations from customers by gathering and evaluating historical data, reducing costs, and enhancing efficiency. Maintaining control over every step of the supply chain, particularly the last stretch that results in complete customer satisfaction, is essential for success.
