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3 Ways To Avoid Overloading When Your Supply Chain Comes Under Pressure 

Written by: Supply Chain Online
Published on: 9 Mar 2021

LOGISTICS3 Ways To Avoid Overloading When Your Supply Chain Comes Under Pressure 

Optimising your supply chain is not just about getting goods out of the door on time; it impacts your profit margins, inventory holdings, product costs, and business' liquidity. In a survey by PwC, it was found that companies with optimised supply chains not only have 15 percent lower supply chain costs, but also experience cash-to-cash cycles at least three times faster. So with the surrounding uncertainty that has shrouded the latest Brexit deal and the recent post-pandemic challenges facing supply chains, many of them are coming under pressure. In turn, businesses are left having to think about the risks that have come with the move. With these changes, the just-in-time model that supply chains have used for decades risks being overturned, and businesses may find themselves overloaded with stock. 

Centralise Your Communication Channels

Miscommunication can cause multiple problems in a supply chain- even under the best of circumstances. The optimal flow of information enables efficient decision-making and collaboration. Whether it is lost information or delayed responses to shipment quantities, this can cause a backlog or send the wrong signal to the other teams involved in your supply chain, such as your procurement team. They may then go ahead and purchase the wrong quantity (or order for the wrong time of delivery), and then businesses are left with more stock than they needed in their operations at that time.

To avoid this, centralise your communication channels as much as possible. Real-time visibility and flow of information help to better coordinate your shipments and ordering frequency. Start with implementing uniform reordering and stocktaking guidelines. Management should also be clear on what information is needed by each party - and how the optimal flow of this information can be achieved. Finally, establish a go-to communication channel/medium for all parties. Project management, resource allocation, or collaboration tools like Slack and Flowdock are incredibly useful in keeping all conversations in one place and keeping everyone informed in real-time.

Revisit Your Inventory Stock Protocols 

With the uncertainty surrounding the Brexit transition and the fear of suspended deliveries, businesses will also need to rethink their inventory stock levels. While companies may be tempted to stockpile as a contingency plan, they should also look towards developing their local supply chains in the event of delays. What is more important, however, is to set out strict contingency ordering guidelines for switching suppliers or placing ad hoc orders. Businesses may also want to revisit their use of stock control and identification tools to avoid duplication, improve capacity, and improve visibility. One way to do this would be to increase/reduce warehouse equipment to cope with the current capacity. However, businesses should also be mindful of sticking to health and safety practices in the workplace, including the use of alloy plates indicating weight tolerances and limits, commonly used by forklifts and construction equipment. 

Overhaul Your Procurement Practices

One move that can improve your business' procurement practices is the use of contract lifecycle management software. This is particularly applicable to transitioning situations like Brexit. According to an Insight Report by Levvel, 81 percent of organisations do not use contract lifecycle management software, and as a result, 36 percent of them have experienced supply chain continuity issues. Automating your supplier contract management can help businesses identify optimal renegotiations and help in tracking delivery time, key in reducing stock overflows. 

Finally, businesses should revisit their facilities and consumers' needs, and map them against their supply chain's capacity. Increasing the frequency of supply chain and warehouse audits helps to identify opportunities for live loading, space utilisation, and potential for automation. The point is to innovate your supply chain to be agile enough to handle times of change - even transformational ones.