How to Improve Supply Chain Flexibility
Logistics is a fast-moving, fragile industry. If you’re not prepared, one small bump in the road can significantly impact your operations, causing delays, supply shortages, lost sales, and more.
The pandemic, port backlogs, drastic changes in consumer demand, and inflation, for example, have all affected supply chain management in the past few years.
In this blog, we’ll dive into what a flexible supply chain is, how you can create one, and how you can leverage technology to withstand the sudden changes of the modern world.
What Is a Flexible Supply Chain?
When one element of the supply chain is disrupted by external factors, the flow of consumer products and services can slow to a trickle, affecting shippers, carriers, and end users. A flexible supply chain, however, allows you to circumvent the delays and disruptions. This lets you quickly adapt to new production requirements, raw material purchases, changes in capacity, and more.
Why Do You Need Supply Chain Flexibility?
Supply chain flexibility helps you ensure the long-term success of your operations and successfully adapt to unexpected changes. Companies with flexible supply chains are able to:
- Increase competitiveness: If you’re able to respond quickly to market fluctuations, you beat out slower competitors and stay ahead of the curve.
- Improve overall efficiency: Being flexible in your supply chain helps you reduce waste, eliminate internal inefficiencies, and improve productivity in the face of adversity.
- Reduce risk: The ability to pivot quickly when the supply chain is disrupted allows you to avoid over- or undersupply and significant losses.
Guarantee customer satisfaction: Responding rapidly to market changes allows you to meet customer demands and deliver orders on time.
Three Simple Ways to Increase Supply Chain Flexibility
Although shippers face many challenges, there are a few essential tools and strategies that you can integrate into management practices to achieve supply chain excellence.
Diversify Your Suppliers
You’ve likely heard the adage, “Don’t put all your eggs in one basket.” If you focus all of your efforts and resources in one area, you can lose everything if it goes south. You need to diversify your suppliers to avoid being impacted by disruptions in the supply chain. For example, if most of your trade relations are in China or India, you might also consider working with suppliers in a number of other countries as well.
Utilize Onshoring and Nearshoring
On a similar note, you can also improve supply chain flexibility by onshoring or nearshoring your suppliers. Although working with suppliers across the globe may help you cut costs, there is a higher chance of your supply chain being impacted by disruptions. Using suppliers within or nearby your home country allows you to reduce shipping times and avoid severe port backlogs. This allows your operations to be significantly more flexible than shippers that rely solely on outsourcing.
Discover Alternative Routes
When it comes to shipping, you need to have multiple route options available. Extreme weather patterns, rising shipping costs, and other disruptions can make it challenging to use your regular routes. Increasing the number of options available increases your supply chain flexibility and helps you avoid delays.
Struggling to get the most out of your supply chain? Sheer Logistics’s supply chain consulting services can help you streamline your operations and learn how to make the best decisions for the success of your business.
Leverage Technology to Improve Supply Chain Flexibility
You can also establish a more flexible supply chain by integrating advanced technology, such as a transportation management system (TMS), into your operations. Here are some of the ways a TMS can improve your company’s supply chain flexibility.
Your TMS can provide real-time visibility into the status of your shipments, such as where your carrier is located and whether they will arrive on time. It can also update you on the status of goods in your trailer, which is especially important when dealing with food-grade items and delicate products. If any issues arise within your supply chain, your TMS will let you know. This allows you to respond quickly and reduce the impact of external disruptions.
Your TMS connects to a wide range of networks and data sources to provide you with valuable insights regarding your supply chain, including:
- Carrier networks
- Customer demand
- Freight rates
- Weather patterns
- Legacy systems
- And more
Through AI and machine learning, your TMS uses this information to create a predictive model. This allows you to proactively respond to changes in the supply chain and navigate potential disruptions.
Managing Carrier Relationships
Your TMS gives you access to an extensive carrier network, which helps you find the most cost-effective and reliable carriers for any given situation. When the supply chain is disrupted, you need to have the means to ship effectively in order to meet customer demands. Your TMS automatically rates carriers based on performance, sends bills and invoices, and even helps you manage discrepancies.
Optimized Routes and Loads
As mentioned in a previous section, to establish supply chain flexibility, you need to have a number of shipping lanes available. Your TMS helps you find the most cost-effective shipping routes for each load. In addition, it can help you determine the optimal load for each shipment. This enables you to ship in the most efficient way possible.
Partner With Sheer Logistics Today to Start Optimizing Your Supply Chain Operations
The modern supply chain faces its fair share of challenges. Fortunately, partnering with a dependable logistics provider like Sheer Logistics can help you navigate them with ease. We integrate leading technology solutions that maximize your supply chain flexibility and help you avoid costly delays and disruptions.
Reach out today to learn how we can support your shipping needs.