Since 2020, small businesses have been plagued by supply chain shortages. It’s an awful time to worry about where your products are and whether they will reach you in time or not. Our supply chain woes aren’t over, as we all know. 56% of small business owners reported experiencing supply chain shortages in the second quarter of 2022.
Inflation can be exacerbated by supply chain problems, which can frustrate loyal customers. It’s not all bad news. As with any American story, hardships can lead to new opportunities.
How to Solve Supply Chain Problems?
Do you have supply chain problems in your company? Don’t worry. These are eight ways to help.
1. Talk to your customers
Although it may sound simple, open communication can make a big difference in your customers’ lives. Transparency with customers does not mean you have to put large posters saying “Inventory low because of circumstances beyond my control” all over the storefront. Be smart. Honesty will be appreciated by your customers.
Let your customers know if you are certain that certain items will not be available. This can be interpreted in-store as a call to action. “Buy now before it’s gone!”. Online, inform customers about the availability of items. Customers can be reminded about items that have been left in their carts for a longer time.
Remember to keep your customers informed about tracking information. Although supply chain problems can be frustrating for all, a little information can make a big difference.
Also read: 3 Ways to Improve the Supply Chain Customer Experience
2. Know your inventory
Although it might not be the most enjoyable thing you do, auditing your inventory is a good idea. It’s not just difficult to obtain products when there are supply chain problems. They can also have a negative impact on your bottom line. How? Customers may look for alternatives if you have run out of products and/or raise prices.
Knowing exactly what you have in your store will help you to understand what your customers and consumers need. This information can help you develop new merchandising strategies for your store.
This knowledge will allow you to attract new customers and increase sales of products that you already have in stock.
3. Stock up
The world is not always affected equally by supply chain shortages. While some items might seem difficult to obtain in one week, they are easy to locate within a few weeks. Things can change quickly. You wanted that item but couldn’t find it? It’s now available everywhere. This is a reliable, always-on item. You won’t find it anywhere else.
Stock up as much as you can. Do not go on a shopping spree or buy items just because they are available. You should only buy the items you are sure you will be able to sell. They won’t lose value if they sit on a shelf for too long. You may need to adjust your storage systems to accommodate additional products.
4. Backup suppliers are important!
You probably have a few trusted suppliers. They’ve been there for you for many years and you are happy with them. Now is the time to take a look at what’s out there.
Backup is the key word. This doesn’t necessarily mean you have to replace trusted suppliers. This is only a way to prepare for the worst. Keep this in mind and don’t limit yourself to one area. Don’t be afraid to look around and find suppliers who may be further away than you are used to. You will have more options when you need them.
5. Look for suppliers in stable areas
Supply chains are constantly affected by political upheavals and climate-related catastrophes. You can see the problems in recent flooding and wildfires in the U.S. Look for suppliers in areas that are not located in the political or climate hot spots.
Let’s take an example: Picture a Gulf Coast manufacturer or supplier that you trust. Each hurricane can make their lives more difficult at the end of summer. A large enough hurricane could cause them to lose their business (at least until the flood waters recede). This situation could lead to supply chain disruptions.
Also read: What is Vendor Management Benefit Process & Best Practices
6. Make sure your suppliers are financially sound
This is not a personal question, so don’t be alarmed. Especially during times of inflation or supply chain shortfalls, it is important to consider the financial health of your supplier.
Ask for references from credit agencies. It is possible to be delayed by your supplier.
7. Diversify your supply chains and products
You may consider branching out to other suppliers if you are dependent on one supplier for an item in high demand. This is not the same as finding backup suppliers. However, these backup suppliers might be exactly what you need for immediate solutions.
Rotating your backup suppliers into your reliable supplier roster is a good option for long-term solutions. This could mean you can offer products from the same brands but with similar features. It might be brand X one week and brand Z the next. Diversifying your supply chain can help you avoid empty shelves.
8. Try new shipping methods
You can now try new shipping methods like dropshipping to fulfill your customer orders. Dropshipping allows you to ship your products directly from the manufacturer. When a customer places an order, they notify you and your manufacturer. They then ship directly to your customer. Dropshipping can be a great way of reducing shipping times, especially if there are suppliers and manufacturers close to your customer.
Dropshipping has its own problems. Dropshipping can be difficult because you might not have enough inventory and customers may end up buying products that are out of stock. To keep your customers satisfied, you will need to work extra hours.
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