3 steps to avoiding supply chain shortage
Updated: Sep 22, 2022
Myriad factors can affect your supply chain: natural disasters, economic uncertainty, disease and terrorist events are just a few.
In these uncertain times, many businesses are unsure of their ability to deliver; only 75 percent of suppliers are confident they will be able to meet demand in 2013, and 33 percent anticipate a problem with a supplier that will result in a shortage of parts or services, according to the American Society for Quality 2013 Manufacturing Outlook Survey.
Here are three steps to help you avoid a shortage of parts as a result of disruption in the global supply chain.
Properly construct your supply chain. Evaluate all areas of your chain and consider ways you can reduce opportunities for disruption, such as dual sourcing key materials and developing risk management plans with suppliers in the event of disruptions.
Research your supply chain partners. While most third parties are reputable, there are those that are on international watch lists or that disguise their business activities. Conduct due diligence so you know who you’re working with from the onset and ensure that the supplier will properly communicate with you and be transparent in its operations.
Do not add inventory. Excess inventory consumes cash, which may be needed for targeted recovery activities in the event of a disruption. Excess inventory can also affect quality if it sits too long and could backfire in the event of decreased demand for the product.