Current Supply Chain Crisis: How to Survive It
Everyone knows that there’s a looming global supply chain crisis. The current supply chain crisis is expected to last until 2023, and its impact is felt globally. When an industry suffers from a critical retail product shortage, it has far more severe implications than just money lost.
In addition to the crisis making, it difficult for companies to source materials, many industries are experiencing manpower shortages. Although this shortage is likely to be short-lived, it will affect businesses’ ability to meet customer demand. Consumers have felt the consequences through higher prices, smaller available quantities, and longer waits for purchases.
Why Is There a Supply Chain Crisis?
The supply chain crisis started with the COVID lockdown when there was a shift in demand, shortages of labor, and other structural factors. The pandemic also shifted consumer behavior, so consumers availed more services from home, which further loaded the supply chain.
Global firms generally work on the lean manufacturing model, where stocks arrive just in time for the inventory without much stockpiling up. It helps in significantly reducing the operating costs but demands a high degree of accurate coordination between the suppliers. Recent lockdowns in China have also increased the issue further, which has caused reduced manufacturing and a shortage of truck drivers. The lean manufacturing model, coupled with a dependency on China, was one of the major reasons for this crisis.
Port congestion and bottlenecks have caused a shortage of usable shipping containers. The prices of these large steel boxes have skyrocketed the prices of maritime shipping further. With close to 374,000 businesses worldwide relying on Russian suppliers and another 241,000 businesses relying on Ukrainian suppliers, major countries like the U.S., Canada, Italy, and Australia have deeply impacted supply chains.
How to Survive the Supply Chain Crisis?
The current supply chain crisis has been a massive challenge for companies of all sizes. The good news is that it’s not too late to act. Here are some tips on how to survive the current supply chain crisis:
Find Alternatives to Your Usual Suppliers
Suppose your main supplier is unavailable due to the crisis; you may need to find new suppliers who can meet your needs at a reasonable price. It can mean switching to suppliers outside China for some. When looking for alternatives, you need to ensure they can meet all your requirements before signing any contracts with them!
You must be prepared to act quickly when things change—and they will! One of the ways to do it is by increasing the buffer and inventory capacity. Leading companies use this buffer to use for new product launches. The challenge is that the buffers are expensive.
Instead of relying on long transport routes and congested ports, many companies have gone local to manage their supply needs. It significantly shortens the cycle time of finished products and gives more control over inventory.
Companies must be proactive to ensure success in each phase of the supply chain. If you are looking for procurement in the medical, laboratory, safety, or industrial supply needs, contact Products Unlimited, Inc. We are award-winning distributors who strive to provide competitive pricing and quick turnaround times. Call 800-865-4683 or click here for more details.