How Manufacturers can Overcome Global Supply Chain Issues During the Pandemic
During COVID-19, it has become crucial for manufacturers to be able to maintain production with limited supply. Supply chain issues can disrupt business operations and lead to substantial financial losses. Manufacturers who have been able to implement strategies that allow them to continue operation are in a great position to come out of this global crisis successfully.
This article discusses how global supply chain models may be transformed and how you may be able to overcome the current challenges. Every business has its own unique set of circumstances so some of these ideas may or may not apply to your manufacturing company. In any case, we hope you find these ideas helpful and encouraging.
Inventory Optimisation
Inventory Optimisation is one of the key ways that manufacturers can minimise their risks during pandemics. When you are able to predict demand, it allows you to make better decisions about how much inventory is currently available and any additional supplies you need to place an order for. Certainly, the scale of COVID-19 caught us all by surprise. None of us could have foreseen the number of supply chain issues we would face and the experience has given us all insight into vulnerabilities we had yet to consider.
Product Substitution
Supply chains have become increasingly complex and globalised due to an ever increasing number of players involved at each step, from raw material suppliers all the way through to final product assembly. During a crisis, it is time manufacturing businesses need to think creatively in order to survive and even thrive. Due to the current global supply chain issues, manufacturers are using alternative or substitute materials.
Local Manufacturing
Manufacturers are now re-evaluating their manufacturing assets and locations, prioritizing regionalism over globalism. This is due to the increased burden on transportation systems during times of crisis which can leave countries or regions cut off from essential supplies for extended periods of time. Regional supply chains can minimise the risk of disruption from pandemic, terrorist attacks or natural disaster.
Stress Test Supply Models
When we get through the pandemic and discover what the new normal looks like, it is important for manufacturing companies to stress test their supply models. Supply chains may be more likely to have more regional elements, but this can pose a number of financial issues also. It may be more cost effective to have materials supplied from a global supply chain so the temptation will be to revert to business as it once was. There may be opportunity to combine local and international supply models to minimise your international risk, with capacity to scale up local support if and when it’s required.
Adapting to Opportunities
The key to any business success is too overcome challenges and adapt to new opportunities as they arise. To remain a viable, profitable company, manufacturers need to adopt a flexible mindset that allows them to adapt quickly and move with the times. Supply chain issues are just one example of how a crisis can create business opportunities for those that are nimble enough to make the most of them. To remain competitive in an ever-changing market place, businesses have to be able to react quickly without being weighed down by unnecessary bureaucracy.
Tips for Segmentation
Whenever there is change, there is opportunity. Switched on manufacturing companies may find there are new market segments that are opening up. Maybe your competitors are unable to serve a need in the market due to their own supply chain issues and you can look to expand in that area. You can apply segmentation techniques to look at the market in different ways. Once these opportunities have been identified it is important to position yourself as a brand leader. Australian company, Industrial Ideas has catalogued a number of resources to support Manufacturing companies in developing their sales and marketing efforts.
Conclusion
The pandemic we currently face has shown many of us in business, that we have some vulnerabilities in our business models. Our reliance on global supply chains has become a huge issue. It has been shown that supply chains can be easily disrupted by pandemics and other global issues. These challenges can lead to financial losses as well as shortages however, we hope your manufacturing company finds a way to navigate these uncertain times and comes out the other side, stronger and more robust to take on the new normal.
