The past year has brought many challenges and while we’re not out of the woods yet, businesses can finally start looking at moving forward.
For some, the impact of the coronavirus pandemic has meant a complete overhaul of their business model, for others it has been a case of holding out until things return to normal, and only a handful of companies will have seen business as usual during these times.
Whatever impact the past year has had on your business, one change everyone can benefit from is making the necessary changes to make your supply chain more resilient. Here’s how you can make that happen.
Diversify your network of suppliers
Travel restrictions and industrial limitations have been exacerbated the past year, but it doesn’t take a global pandemic for these problems to occur. If all of your suppliers operate from the same area, then any type of regional roadblock that affects one of them will affect all of them.
You can counter this by diversifying your network of suppliers globally, so that you always have options or, even better, you can partner with a central distributor who can source components from a variety of places, giving you one point of contact for all your supply needs.
Look at alternatives for hard-to-find components
Even before the disruption caused by the pandemic, the electronic component industry was suffering a component shortage, and this continues to be the case. If you want to build a truly resilient supply chain, then you need to start looking at alternatives for hard-to-find components.
Due to the increased demand caused by the mobile and automotive markets for components such as MLCCs, demand looks to continue outstripping supply, at least for the time being. Look carefully at your products and list all the potential components that can be swapped for alternatives that your suppliers can source comfortably.
Maintain strong relationships with suppliers and manufacturers
By maintaining strong relationships with the suppliers and manufacturers that you work with, you will be better positioned to still operate effectively in times of shortages or disruption. If you only occasionally do business with certain suppliers or manufacturers, then you won’t be high on their list of priorities when times get tough.
One way that you can cultivate these strong relationships is by working with your suppliers on sales forecasts so that you both know what components you will need and when, well ahead of time.
Reduce costs where possible to improve cash flow
Even when profits aren’t regularly coming in, businesses still have payments to make. Improving your cash flow is an essential part of building a resilient supply chain so that bills, wages and other costs are still taken care of in difficult times.
Assess your supply chain’s transactions and see where cuts can be made. For example, holding excess stock can be a money sink and offloading it will improve your cash flow and reduce any storage costs that you are paying.
Full and regular risk assessments
In order to build a resilient supply chain, you need to make sure that you are fully aware of all the risks that could challenge the operation of your business. Map out all potential risks to the supply chain and make contingency plans for those that you identify.
It’s important to understand that this isn’t a one-time action; carrying out regular, comprehensive risk assessments is essential in a market that is constantly changing.
Be proactive and plan for the long-term
Short-term and reactive solutions may solve the immediate issues that you have, but they will not help you to build a resilient supply chain. While having a flexible approach will prevent you from being caught out, you also need to be proactive and think about the long-term implications of any changes you make to your business, and whether they will continue to serve you well past the problems you currently face.
Hopefully, you now have a better understanding of how to build a resilient supply chain, but if you need more help, get in touch with us here at Rebound to see how our global sourcing of components can help safeguard your business against future disruption.