Key Points:
- Disruptions in the supply chain refer to any event that hinders the movement of goods from the manufacturers to the suppliers, etc
- The COVID-19 crisis also led to disruption in the supply chain of many businesses
- 95% of businesses said they suffered operational problems due to the pandemic.
Supply chain disruptions can occur at any time - whether minor or severe. For example, the COVID-19 pandemic caused a severe disturbance in the global supply chain. As a result, 95% of businesses said they suffered operational problems due to the pandemic.
Other supply chain disruptions could be material shortages, natural disasters like earthquakes, factory fires, transportation breakdowns, cyberattacks, etc.
When an aspect of the supply chain is disrupted, it affects the entire network. Sadly, with the increasing complexity of the supply chain, there is an increased risk of something going wrong and involving the whole system. Thus, this is a wake-up call for supply chain leaders to build resilience.
This article covers all you should know about supply chain resilience, causes of the supply chain disruptions, supply chain risk management, and how to build supply chain resilience.
Table of Contents
Supply Chain Resilience Definition
Supply chain resilience refers to a business's ability to anticipate, navigate and recover from unexpected events that can cause supply chain disruptions.
Building a supply chain resiliency can be explained as creating plans and strategies to keep your customers satisfied and your business moving irrespective of any interruption.
It is a huge but worthwhile investment, as it reduces the risk of unforeseen situations and protects the chain from production-halting disruptions.
What's Causing These Supply Chain Disruptions?
Disruptions in the supply chain refer to any event that hinders the movement of goods from the manufacturers to the suppliers, etc.
Here are a few common causes of supply chain resilience disruptions.
Geopolitical instability
Shipping and logistics are directly affected by geopolitical situations. For example, when countries are faced with civil unrest, the supply chain will be affected. There will be loss of communication, travel restrictions, increased costs, delivery delays, and many more.
An example is the trade war between China and the United States which hindered the flow of goods between the two countries. The US government imposed tariffs on Chinese imports, which led to an increase in the cost of goods.
Covid-19
The COVID-19 crisis also led to disruption in the supply chain of many businesses. Imports and exports of goods were impossible due to the movement and travel restrictions.
Also, customers' increased demands for essential products, but manufacturers were unable to meet them. As a result, most retailers in the United States went months without inventory due to the scarcity of raw materials and components. Similarly, many factories and warehouses were also shut due to the COVID-19 pandemic, disrupting fulfillment and distribution processes.
Transportation breakdowns
Breakdowns in transportation can also affect the supply chain. Extreme weather conditions, cargo theft, machine breakdowns, shipping damages, traffic delays, and regulation changes are examples of events that can affect transportation. This is why businesses should work with trustworthy logistics partners with supply chain resilience in place.
How to Build Supply Chain Resilience (Best Tips)
It is important to note that robust supply chains are designed specifically for each retailer's demands. However, to prevent disruption and satisfy your customers' needs, you must develop a supply chain that is flexible enough to deal with any unforeseen event that might occur during the manufacturing to the distribution of the goods.
Below are five valuable tips for building supply chain resiliency.
1. Make your inventory available in numerous locations
Usually, merchants split their inventory across multiple sites to reach more customers, reduce shipping costs, and speed up delivery. However, splitting inventory could also be important in disasters or unpredictable events. So, if a warehouse is closed down, you will still be able to fulfill your customers' orders from your other distribution centers.
2. Consider buffer shock to build supply chain resilience
21% of respondents in a survey admitted that the availability of safety shock is one of the top three indicators of supply chain resiliency. Buffer shock refers to a reserve of your goods kept for unforeseen circumstances or price fluctuations. Having a buffer means that you can continue to fulfill your customers' orders while solving any supply chain issue. Although it is costly, it's worthwhile for businesses that can afford it.
3. Diversify your supply network
Sourcing your goods from multiple suppliers is another way to build supply chain resiliency. However, relying solely on one supplier can be dangerous when they cannot deliver due to shortages, restrictions, or disasters. So, the solution is to multisource with different suppliers to constantly meet your customers' demands despite any situation.
4. Utilize different shipping couriers to boost supply chain resilience
There is an increasing demand for logistics and distribution services due to the expansion of the eCommerce market. And shipping couriers are constantly faced with capacity issues. By partnering with multiple shipping couriers, you are less likely to have any inconvenience or vulnerability in delivering your items to your customers.
5. Ask logistics experts
Also, you must have a logistics expert in your company. They will be able to predict possible disruptions and proffer solutions ahead of time. Often, it might be challenging to figure out the issue, but having a knowledgeable logistic staff can be helpful. They will provide strategies and tips to optimize your supply chain and build resilience.
Robust Supply Chain Strategies with Easyship
Building a robust supply chain infrastructure is essential and will give your business a competitive advantage.
Many companies cannot survive terrible situations because of a low resilient supply chain. However, building a resilient supply chain will help your business stay on top when confronted with disasters.
With Easyship, you can build supply chain resilience and continuously fulfill your customers' demands with features such as the following:
- Duties & Taxes Visibility: Easyship works out all duties and taxes for your international shipments to handle your international orders with ease. Calculate your duties for overseas shipments here
- Global Fulfillment: Easyship has warehouse partners on four continents to reach your customers worldwide. Plus, Easyship helps scale up fulfillment capabilities without increasing overhead costs
- Shipping Policy Generator: Our shipping policy generator helps merchants and crowdfunding campaigns generate their shipping policy by providing tracking and insurance options, plus other vital information for your shipping process
Ready to ship? Sign up for a FREE Easyship account and learn how to build supply chain resiliency
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