Supply chain resilience involves the ability of a business to thrive in the midst of supply chain uncertainties. For a business to thrive in this evolving global system, it must embrace the fact that there are factors that disrupt the supply chain, which is out of man’s control. All that needs to be done is to come up with strategies and contingency plans to cope with these situations. 

Read through this post to discover effective strategies to prepare your business for supply chain disruptions and uncertainties.  

Possible Causes of Supply Chain Disruption 

Several factors come to play in the supply chain. Some boost efficiency while others tend to disrupt activities and the flow of goods down the chain. Supply chain disruption can be caused by activities within the business operation or external factors.  

Price Fluctuations of Operational Elements 

When there is fluctuation in prices of any of the equipment or accessories used for the storage and distribution of goods, it can cause corruption. A good example is the price fluctuation for fuel. In a case where the price of fuel surges is extremely high, it tends to affect manufacturing and transportation operations in the supply chain, which can end up increasing shipping cost from Dubai to Kazakhstan, and other trade lanes. 

Due to high costs overheard, businesses may be forced to stop operations until there is a little decrease in the price.  

Natural Disaster  

Natural disasters such as tsunamis, wildfires, floods, earthquakes, etc. will tend to disrupt the supply chain in the affected regions. It will disrupt production and the normal flow of marketing activities. For international trade, it becomes difficult to push products into the affected regions.  

Inefficient Supply Chain Practices by Brands 

This is an in-house problem or a self-induced disruption. When businesses drop down the bar concerning production, storage, and distribution practices, it can lead to disruption in their supply chain. Such inefficiencies can be poor storage and unoptimized transport networks that halt the progression of products down the chain. 

Pandemic/Public Health Emergency 

This is a familiar scenario as it brings back memories of the Covid-19 pandemic that affected the globe a few years ago. The pandemic took its toll on the global logistics and supply chain as every country was in lockdown. This disrupted the movement of goods and general international trade.  

Economic Downturn  

When economic forces are down and the buying power of consumers reduces, it leads to disruption as there will be more inventories but less demand. There are no two ways about it, inventories can’t go out when there is very little demand. This will lead to delays and longer lead times.  

Conflicts/War 

Conflicts will disrupt both local and global supply chains. A good example is the conflict between Ukraine and Russia. It will lead to the blockage of shipping routes that cut across the affected regions. It also sees reputable global logistics service providers indigenous to the affected region suspend operations.  

How to Prepare for Disruptions and Uncertainties in the Supply Chain 

Uncertainties are things that no player in the supply chain can prevent. We can only fortify our supply chain system and build resilience against disruptions. Here are preparation plans that can help build a resilient supply chain.  

Simulate and Test “What-if” Situations 

This is creating a model of disruption and seeing how your supply chain copes in that situation. You can brainstorm on past uncertainties and remodel them into your operations. For example, put in some delay into your supply chain due to extremely low demand, observe the level of impact it makes on the business, and brainstorm contingency plans with the team.  

A significant breakthrough in this simulation will give a firm contingency plan in case the situation arises in real life.  

Diversification of Suppliers and Carriers  

This means engaging with several suppliers, carriers, and other key players. For example, if a natural disaster hits the region of your supplier, you can easily beckon other suppliers to meet the demand. Another example can be one of your carriers being affected by geopolitical conflicts. You can easily use another carrier with an alternative route to the destination. 

Improve Your Supply Chain Visibility 

A business needs to be proactive to cope with supply chain uncertainties. It is quite difficult to take proactive actions without visibility. Improved visibility will give information about your trade zone. For example, you can receive signs of bad weather along a transport route and take proactive actions to use an alternative route.  

Use Technology to Build Resilience 

Technology knits the global supply chain into a simple community. With data sharing, supply chain management tools, and other digital vices, you can be in the loop of all that is happening. You can study patterns to predict and make contingency plans.  

Conclusion 

Supply chain uncertainties are inevitable, having caused disruption in the past and will do the same in the future. Hence every business must build resilience rather than getting massive hits by the impacts of disruption. Take advantage of the outlined strategies to build a resilient supply chain for your business.