Why flexibility is so valuable in supply chain management

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This past year, businesses across all sectors have had to adapt. Whether it’s been changing the way products get to customers or changing the way that products are manufactured altogether, we have learned that in order for businesses to survive, they have to be flexible.

This is especially important for supply chains, where issues of delays, manufacturing limitations and component shortages have dramatically affected business, but these problems can be lessened by a flexible approach to supply chain management. In this article, we explore some tips for adopting a flexible outlook.

Streamline, but have options

Working with many suppliers in order to get the lowest purchase price on individual products could actually be costing money due to minimum order quotas, contractual obligations and any additional delivery costs.

Switching from multiple suppliers to a single strategic partner will make it easier to keep track of all your orders as well as to resolve any issues quickly. However, even with a strategic partner, you should have trusted backups for all your suppliers, so that you can still get your components should your main sources become unavailable.

Diversify

Part of being flexible means looking beyond your usual considerations when you are searching for suppliers. Not only will this mean that you could get a better price, but it also gives you options if the market is affected by regional restrictions.

Diversifying your supply chain across different countries means that if travel or trade restrictions affect one of your suppliers, you may still be able to source what you need from another area where these restrictions don’t apply.

Embrace strategic sourcing

Strategic sourcing is a method of sourcing that favours continual re-evaluation and improvement of a business’s purchasing activities, looking past the lowest purchase price of individual products in the interest of getting the best possible total cost.

Strategic sourcing is a cyclical process that requires a constant evaluation of the market and the capacity to adjust continually, rather than a dramatic and reactive overhaul of processes to adapt to unforeseen circumstances, such as the COVID-19 pandemic.

Look for alternatives in case of shortages

Component shortages and long lead times are incredibly frustrating and, by sticking with a supply chain management approach that has no flexibility, there is little you can do other than wait. Some components can be replaced with a near alternative without redesigning the product or PCB and these alternatives may be able to be sourced when the primary component cannot.

Invest in new tech

Adapting is essential for businesses to thrive, which may mean investing in new tech such as AI and IoT systems that can automate administrative tasks and free up labour for more important duties. Some of these systems can also be operated remotely and out of hours for increased efficiency.

Many businesses have a method of operating that is time tested and never strayed from. Whilst this consistency has certain benefits, a one-size-fits-all approach is ineffective in the face of significant disruption. A flexible approach is built upon the assumption that factors affecting the market will change, making adaptation to unfavourable circumstances that much easier.

Jeff Brind is the Chief Information Officer at Delta Impact, who offer flexible and proactive supply chain solutions.

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