North America is known for its free trade. This is why when we face disruptions in levels such as political, economic, social, and many others, supply chains are heavily impacted.
Of course, when these events take place, as a business, it is difficult to escape these disruptions. However, it is possible to limit the consequences, and be well prepared. Here are a few tips to follow to ensure a smooth continuation of your supply chain.
1. Monitor variations related to the cost of raw materials
There are different methods and technological tools that offer predictive solutions. These work based on the company’s procurement history or using modern technological concepts, to assess risks regarding raw material costs. These methods or tools allow you to have more visibility on the range of variations of this parameter and subsequently help make decisions very early in the procurement process to manage this variability.
2. Avoid sourcing products from single-source suppliers.
Sourcing your products or raw materials from a single supplier is very risky, as you may encounter inventory problems if they run out of stock. This will cause production or customer satisfaction difficulties, and thus have consequences on your entire supply chain. Therefore it is important to buy from several suppliers. This allows you to have the necessary resources to meet your needs and those of your customers, and, to have access to a competitive market that will work in your favor.
There are intelligent sourcing platforms that allow buyers to find many similar suppliers for a product through machine learning and Artificial Intelligence (AI). This technology allows you to be aware of the different companies that can supply you and thus limit your risk. As a company, we use Tealbook platform to help our customers not only access to this type of information, but also to consolidate and cleanse their supplier’s databases, i.e., remove duplicates and distinguish between parent and subsidiary companies.
3. Anticipate variations in delivery times
Variability in delivery times is a problem in any supply chain. This problem is due to various factors such as variations in customer demands, transportation delays, customs problems in case of international shipments, unforeseen events such as weather, etc. Therefore, as with cost variations, there are effective tools and systems available that can perform predictive analysis of delivery times, based on available data, and thus try to limit the impact of variability. In order to limit this disruption, you can also favor your procurement from nearby suppliers or also mitigate the risk of delivery delays by sharing it with suppliers. In other words, you can continuously share your production or demand forecasts with suppliers so that you don’t place orders at the last minute.
4. Establish quality controls
Implementing quality control practices and performing these controls frequently within a company allow eliminating non-compliant products. Therefore, making sure that you purchase from suppliers who perform these controls allows you to have compliant products according to your needs. Indeed, it happens that you need to get your supplies quickly and/or that you want to pay low prices for a certain need. If this is the case, you have to be careful with the different suppliers you deal with, because a lower price does not always mean that the products are of quality and in conformity. So, take the time to properly qualify your suppliers to avoid potential problems and ensure the quality of your products.
5. Conduct a supplier's audit
Performing a supplier’s audit consists of an internal analysis of our suppliers, but also an external analysis of the different suppliers available on the market. Indeed, it is important to choose your supplier well, because it is an important actor in the supply chain of a company. Having a reliable supplier, allows you to have the right raw material, good products, to be delivered on time and with optimal costs. Therefore, when choosing a supplier, it is important to make sure that they offer good service and that they respect quality standards and contracts. There are several smart tools that provide information on suppliers’ qualifications, such as system quality management certificates, such as ISO 9000/9001, as well as information on corruption perception indices in their locations. As a result, buyers have the data they need to select their suppliers.
6. Sourcing from local sources
In order to anticipate the consequences of disruptions in its supply chain, it is important to source from local sources, such as local suppliers. In this way, you minimize the risk of supply problems and ensure customer satisfaction.
7. Increase safety stocks
In the event of a disruption in the supply chain, your inventory will definitely be impacted. Indeed, you will have difficulty to supply yourself and ultimately you will be faced with a stock shortage. The solution to counter this disruption is to increase your safety stocks while following a good inventory management. Indeed, this method will allow you to have the right quantity of raw materials to produce and the right quantity of products for sale. In this way, you will be able to meet the needs of your customers and ensure their satisfaction.