Best Practices to Tackle Supply Chain Disruptions in 2021
There is no doubt that pandemic has impacted the flexibility of supply chain operations globally. Startup firms especially need a better coordination strategy for activities like inventory management, warehousing, delivery of products, and transportation of goods.
Business leaders must take rapid actions to manage the future crisis and enable businesses to serve their customers better, and help economies rebound.
India’s Supply Chain Industry – Some Stats & Figures
India’s Logistics and supply chain industry contributes upto 14 percent of the overall GDP, which amounts to nearly 400 USD.
Around 60% of supply chain companies in India have indicated disruptions in their supply chain due to the Covid-19 pandemic in 2020-21.
47% of businesses belonging to Indian private and public corporate sectors, multinational companies had indicated a delay of four weeks in sourcing products due to lockdown restrictions.
The Indian 3PL market expects a growth rate of 11.5% from 2021 through 2025.
The challenges experienced by supply networks and logistics due to the pandemic have highlighted the urgent need for having a reliable 3PL service provider like Shiprocket that helps businesses deliver their products through an automated platform across 29000+ pincodes in India and 220+ countries abroad.
The challenges and risks experienced by the sector during the pandemic have highlighted the need for creating a more substantial and more relevant supply chain infrastructure that can withstand unexpected disruptions.
Reasons for Supply Chain Disruption
In coming years, we expect that supply chain risks and challenges will persist and is driven by factors like:
- Increased consumer demands
- Talent gaps across logistics operations
- Lack of flexibility in eCommerce fulfillment operations
- Massive stock shortages
- Lengthy backorders
- High cost of IT infrastructure & technologies.
Companies that have faced the market volatility of 2020, likely need to execute tactically to mitigate the risks and protect the functioning of logistics networks including their operations. For doing so, suppliers and manufacturers from across the country need to have a strong understanding of potential disruption, market complexities, and analytical monitoring.
Despite the fragile economy of 2021, companies are moving forward with dynamic changes for addressing inefficiencies in the process to work smarter.
5 Key Actions to Respond to Supply Chain Disruption
1. Supply Chain Contingency Planning
According to a study, nearly 75% of businesses claimed to have supply chain disruptions in some way due to lockdown and Covid-19 restrictions. A contingency plan enables businesses to handle unexpected events, such as transportation restrictions and lack of communication between different parts of the supply chain.
Planning has always been important, especially regarding warehousing, inventory management, transportation, and fulfilment. These are some of the critical components of an effective supply chain. Planning out alternate shipping options can help meet rapidly shifting consumer demands and preferences.
Let’s say, for instance, what if a driver’s route collapses midway? There may be heavy rainfall or a snowstorm? Or there may be a lockdown in your city due to a pandemic situation. These scenarios are likely to occur; it’s better to plan for a seamless supply network SOPs. Planning for different shipping options and contacting nearby suppliers can help mitigate the risks you receive when in the middle of an unexpected crisis.
- Increase your safety stock in case of a lockdown situation. To reduce delivery lead times, deal with nearby sourcing suppliers.
- Develop an effective plan for reverse logistics because the slower the return process, the longer the disruption.
- Quality checks have to be performed for all suppliers that provide critical services to your end customers. Try to physically visit your suppliers’ location to check what is happening in their facility.
Ultimately, contingency planning helps mitigate supply chain disruptions and offers numerous solutions for companies to manage their logistics network.
2. Improve End-to-End Visibility
If your logistics network lacks end-to-end visibility, then one needs to address this issue first. Having complete visibility of every element of your supply chain will help you plan and respond to situations when a disruption occurs.
Utilizing end-to-end visibility in the supply chain allows you to plan better for goods that are stuck at a shipping port or in transit due to the unavailability of a carrier. Knowing where your shipment is can help maintain your packages properly and ensure that all your goods are intact. End-to-end visibility is a critical factor for minimizing disruption and planning better in the weeks of the disruption.
There are excellent use cases of how shippers have benefited from data analysis in crisis-resilient supply chains. Having better visibility of supply chain processes yields better results from digital transformation initiatives. And this is important amidst supply network disruption scenarios that businesses are having to deal with. This end-to-end visibility is a valuable add-on for companies that wish to stay competitive in the years to come.
3. Put Communication First, With Suppliers
When in the middle of a crisis, any communication less than perfect can contribute to logistic network disruptions. Make sure your suppliers know about changes in plans, how they will affect the business, and what they can do to help fleet operations. Not to mention keeping your suppliers on the same page is one of the things you need to prioritize in your supply chain operations.
Establish clear communication with suppliers at the beginning of a new partnership. Once you have that, there are fewer headaches for you to handle, like stock shortages, late delivery disputes, and shipping costs.
Be easily accessible to your suppliers. Allow for effortless, trackable communication; make sure your communication is thoughtful and contains all critical data that both parties need to see. With clear communication, organizations can react in real-time and make quick alternative decisions when necessary.
4. Cybersecurity Tools to Manage Logistic Network Risks
Hopefully, you will never face any disruption in the supply chain. But in case you do, it’s essential to know how your logistics network has been affected and how you will address it. At this moment, you need risk management tools to manage your fulfilment processes.
For example, Resilinc is a risk management tool designed to map the supply chain performance of a company and used to identify additional risks.
To help mitigate the risk related to logistics network mapping, relying on your manual effort is not enough. Technologies like Artificial Intelligence and Big Data are now being used in risk management tools. These tools are designed to measure the risks associated with environmental conditions. One such tool is Riskpulse, which can track environment and weather factors that can affect shipping.
Transparency is vital, as every business is subject to cyber threats. To defend against supply chain disruption risks, regulatory violations, and data breaches, start using Risk Methods software that indicates all kinds of ascertaining supply network risks.
The software solutions like anyLogistix, IBM AppScan, and CA Veracode should be implemented to tackle cybersecurity threats and data breaches.
Customer Satisfaction Is the Top Priority
Supply chains begin and end with customer satisfaction. It is one of the important factors to take care of, during supply chain disruptions. Build a new digitally-driven method for customer centricity, greater trust, transparency, and innovation.
For monitoring supply chain metrics, track how you are treating customers. How many new customers are coming in every day? How many are leaving you? What areas of your supply chain receive the most complaints?
Hopefully, your customers don’t feel like you are hiding any information. Transparency is vital in supply chain operations. Your customers should be aware of your distribution centre or from where you are supplying.
Insufficient customer collaboration is the crucial indicator of disconnected processes that results in impacting your overall profitability. To help soften the customer consideration, consider taking measures such as offering discounts and pay compensation.
Supply chain management is not just limited to transportation and logistics. It also includes building connections with your customers and suppliers as they too contribute towards the robustness of your supply chain. Companies should think beyond and take tough decisions to tackle the risks of supply chain disruption. Disruption is an opportunity to empower your business which means more happy customers served by your brand.
Shiprocket is an end-to-end 3PL provider that helps you with inventory management, warehousing, supply chain, and distribution. We also help d2c suppliers with error-free shipping operations, ensure the fastest delivery to customers, and save on shipping costs.