Exactly how to avoid supply chain disruptions in the future

Exactly how to avoid supply chain disruptions in the future

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Companies that mix up their logistics and use additional routes address many supply chain problems.

In supply chain management, disruption within a path of a given transport mode can notably influence the entire supply chain and, in certain cases, even take it to a halt. As such, company leaders like P&O Ferries CEO and Maersk CEO work hard to add flexibility into the mode of transportation they depend on in a proactive way. As an example, some companies utilise a flexible logistics strategy that utilises numerous modes of transportation. They urge their logistic partners to mix up their mode of transportation to include all modes: vehicles, trains, motorcycles, bicycles, ships and even helicopters. Investing in multimodal transport techniques like a combination of train, road and maritime transport and also considering various geographical entry points minimises the weaknesses and risks associated with counting on one mode.

Having a robust supply chain strategy could make businesses more resilient to supply-chain disruptions. There are two kinds of supply management problems: the first is due to the supplier side, namely supplier selection, supplier relationship, supply preparation, transportation and logistics. The next one deals with demand management problems. They are problems related to product introduction, product line management, demand preparation, product rates and promotion preparation. So, what common methods can companies adopt to improve their capacity to sustain their operations each time a major disruption hits? Based on a recent study, two methods are increasingly appearing to work when a disruption takes place. The first one is called a flexible supply base, while the second one is called economic supply incentives. Although a lot of on the market would argue that sourcing from a sole supplier cuts costs, it can cause dilemmas as demand fluctuates or in the case of an interruption. Hence, relying on multiple manufacturers can decrease the risk connected with single sourcing. On the other hand, economic supply incentives work if the buyer provides incentives to cause more manufacturers to enter the market. The buyer will have more flexibility in this manner by moving manufacturing among suppliers, particularly in markets where there exists a small amount of manufacturers.

To avoid incurring costs, various companies start thinking about alternate roads. As an example, due to long delays at major international ports in some African countries, some companies encourage shippers to develop new paths along with conventional routes. This strategy identifies and utilises other lesser-used ports. Rather than counting on an individual major port, as soon as the shipping business notice hefty traffic, they redirect items to more effective ports across the coastline and then transport them inland via rail or road. According to maritime experts, this strategy has many advantages not merely in relieving pressure on overwhelmed hubs, but also in the financial growth of growing economies. Business leaders like AD Ports Group CEO may likely agree with this view.