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Creating Supply Chain Stability in Uncertain Economic Times
If you've been watching the news lately, it appears that there are economic risks around every corner. Between US tariffs and Brexit, it's no wonder that companies are seeking to maximize their stability and reduce economic risk. There are a variety of ways to reduce risk and increase stability and many will vary significantly with the industry being targetted, however, some general guidelines exist. Here at 6 tips to increase the stability of your supply chain.
- Diversify your supplier base.
Remember the old saying "don't put all your eggs in one basket"? A lack of diversity is inherently risky as you are relying on a single entity for stability, and if that entity fails you lose it. By having a limited supplier base you rely on one or a few companies to maintain your company's stability. If you increase and diversify your supplier base, you can make it easier to manage unexpected changes in your supply chain.
- Optimize your inventory
Do you have items sitting on your selves which move slowly, or hardly move at all? If so, you could be wasting valuable space for items that move more consistently. Bestselling items are less risky, and more likely to result in stable sales. It is therefore important to optimize your inventory to ensure that you maintain adequate levels of consistent and stable sellers instead of a warehouse full of risky low-selling items.
- Utilize flexible manufacturing
Producing an item at consistent levels is rarely an efficient strategy as demand can change quickly, leaving you with shortages or excess product to store. Both under- and over-producing costs money and time which could be better utilized. This is why it's important to consider flexible manufacturing practices that are able to adapt to changing demand. Additionally, it may be necessary to consider a "make vs. buy" strategy, especially when demand changes quickly, to ensure you have a stable method of meeting demand.
- Expand your market base
As with diversity in the supplier base, diversity in your market base helps to reduce risk by spreading your reliance to a variety of channels as opposed to a single one. Consider reaching out into adjacent and accessible markets for a quick way to expand your market base.
- Engineer value
Engineering value means creating products and services with the customer in mind, ensuring that your offerings deliver real and essential value to your customers. In doing so, you help to ensure that your customers rely on your products and services, and will be more likely to purchase them consistently. This consistency means stability for your sales and more stability for your business.
- Seamless supply chains
Broken and disconnected supply chains are full of wastes and inefficiencies which cost money and time. These chains are also significantly less adaptable than more seamless chains, making it difficult to manage risks and unexpected changes. By utilizing a solution like Routeique to create a seamless supply chain, you reduce risks and wastes throughout your network, helping to create a more stable supply chain network.