5 Ways to Improve the Supply Chain Crisis
Retailers have been facing a constant stream of supply chain problems over the past year. These range from ports jammed with containers and low raw materials to factories closing down and truck drivers running out, all of which have led to a steady stream of devastating supply chain issues.
The worst part? Economists and industry experts now believe that the problems could persist into 2023 and beyond. Geopolitical tensions, ever-increasing costs, and geopolitical tensions will add to the disruption caused primarily by the pandemic.
Many retailers are now in a difficult situation. Many retailers are facing critical decisions in order to survive and thrive.
Good news: Retailers that take proactive steps to address supply chain issues in advance can not only survive, but thrive. It is well-known that supply chain management can reduce overall costs and increase profitability. These are six ways that brands can overcome the supply chain crisis by 2022.
1. Optimize Inventory
During a supply chain crisis, it can be especially stressful to have a low inventory or promotions. Retailers need to be able to predict the demand for their products accurately in order to strike the delicate balance between stock-outs of profitable items and warehouses full of inventory that cannot be moved.
Brands can make this simple with the best demand planning tools. They connect sales data and factor in seasonality and promotions to predict which products consumers will purchase. With accurate inventory forecasts, retailers are able to regain control of their supply and, if necessary focus on replenishing the most popular items.
This is a good way to optimize inventory at all times. It’s especially important for brands to navigate the current market.
Also read: Best Inventory Management Software for Small Business
2. Automated Shipping
It is crucial that retailers streamline shipping workflows to reduce container costs by 600%. This means introducing automation.
Automated shipping is when orders are placed and pick, pack, and ship workflows are initiated automatically. This includes sending invoices, choosing the best shipping provider, and printing labels.
Automated shipping, if implemented correctly, can dramatically improve supply chain efficiency and save valuable time. Automating shipping can ultimately help your business grow while keeping your customers satisfied.
3. Follow Your Data
Your success as a leader in a rapidly growing business depends on your ability to make the right decisions at just the right moment. The supply chain crisis brought with it a lot of uncertainty. This makes it more difficult to make quick decisions.
What’s the solution? The solution? Tech tools that provide the information you need when you need it. The right data will allow you to make faster, smarter decisions about everything, from which channels to add to increase profit to which items to invest in.
Data is key to ensuring that you have a clear path to optimal supply chains and protected margins in these uncertain times.
4. Diversify Suppliers
It is easy to become accustomed to using the same suppliers. But it is time to make a change. Consider how much you are paying for shipping and the lead time. Examine whether suppliers are meeting your expectations and meeting your targets.
This will allow you to determine the cost-effectiveness of each supplier. It might not be financially feasible to continue with a supplier that is too cheap but has a long lead time. You won’t have the ability to sell during this replenishment period.
You should consider investing in operations software, which can give you real-time visibility into inventory levels across all channels. It can also help you assess the supplier’s performance. The best way to avoid supply chain volatility is to learn more about your suppliers.
Also read: 8 Advantages of Effective Supply Chain Management
5. Accelerate Cash Conversion
It’s important to consider how long it will take your business to turn inventory into cash with all the disruptions taking place. If you are experiencing significant disruption, it may not be feasible to keep inventory in stock ‘just in time’.
You can determine if your cash is more tied up in inventory or raw materials than it is in sales. A good retail operating system will be able to handle this. Next, determine if your workflow and practices need to be changed to accelerate the conversion of your inventory into cash.
6. Keep Looking for Ways to Improve
There are no one-size-fits-all solutions to the supply chain crisis. While the steps above can be used to optimize your supply chain, It’s important to recognize the importance of continuous improvement as the commerce landscape changes.
Focus on continuous efforts to reduce inefficiencies, whether it’s automation, warehouse management, or diving into advanced reports.