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How to Handle Supply Chain Disruptions Without Losing Money or Clients

Posted by Devika Hastak

May 2, 2024

Strategies to help small businesses prepare for future supply chain disruptions.

We often underestimate supply chains’ vital role for individual businesses and globally. This delicate process, which dictates the product lifecycle from procuring raw materials and manufacturing to distribution and after-sale support, is essential. So, of course, even a minor supply chain disruption can have dire consequences, and we learned this the hard way during the recent global pandemic. 

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The World Economic Forum said it best – the COVID-19 pandemic made us realize that the global supply chain is like a house of cards prone to crumbling when there’s an unexpected breeze. For instance, the pandemic caused severe disruptions to small businesses’ supply chains due to delivery and shipping setbacks and delays with domestic and international suppliers. Many businesses experienced a shortage of raw materials, delayed shipments, and reduced production capacity. The impact was significant, with small businesses having to scramble to find alternative supply chain options, and delayed production and manufacturing and operating capacities were affected.

There is much to learn from the COVID-19 pandemic, especially how small businesses can shore up their supply chain management in preparation for the next ‘unexpected breeze.’ Let’s examine the importance of bolstering your supply chain processes and the steps you can take to ensure your small business is unaffected by potential disruptions.

Supply Chain: The Lifeblood of Small Businesses

A business’ supply chain is critical to its operations and ultimate success. Without it, you wouldn’t have a product to sell or a distribution channel for those products to reach customers. Your supply chain is the journey of your product. It includes the procurement of raw materials and ingredients from suppliers, production and manufacturing, distribution of products to retailers or wholesalers, delivery to customers, and post-sale services such as repairs, maintenance, warranty support, and general customer service. 

Ensuring a smooth sailing journey for your products and making your supply chain resilient and efficient is critical to your small business’ continued growth and profitability. An efficient and streamlined supply chain process will enhance your business’s cost efficiency, increase customer satisfaction, and give you a competitive advantage. It also helps ensure customers receive a high-quality product within short delivery times. All this works wonders for your public image as a reliable and customer-focused company.

Effective supply chain management makes you agile and innovative. You can adapt quickly to change and keep up with customer demand even during a crisis such as a pandemic. Being agile and adaptable is just one way of ensuring sustainable growth for your small business.

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How You Can Build Supply-Chain Immunity

As a small business, you have demonstrated remarkable resilience in the face of external factors such as pandemics, geopolitical issues, and natural disasters that can disrupt your supply chain. You are also the most reliant on your supply chain to establish yourself in the market. The good news is there are ways to build a protective shield around your business with technology, risk management for SMEs, and supply chain finance for consumer goods. With these simple strategies in place, you can plan and minimize the after-effects of a supply chain disruption on your business, further strengthening your resilience.

Regionalize or localize your networks

One of the biggest lessons most businesses learned from the COVID-19 pandemic is the need to regionalize or localize their supply and production networks. This means focusing on suppliers and manufacturers within a specific region or country, rather than relying on global suppliers. A 2021 McKinsey survey found that almost 90% of senior supply-chain executives planned to pursue regionalization over the next few years. Instead of spreading out to countries with lower labor costs, more companies now favor keeping their supply and production closer to their home country or a point of consumer demand. 

Regionalizing or nearshoring your supply and production networks will help reduce transportation and logistics costs. It will also maintain the stability of your supply chain operations in the face of environmental factors, geopolitical issues, or other external factors.

Prioritize supply chain risk management

Risk management strategies are not just crucial, they are your proactive approach to building resilience and preparing for volatility and uncertainty in today’s business landscape. The COVID-19 pandemic was a wake-up call for supply-chain executives, prompting them to establish a risk management plan or strengthen their existing capabilities. Risk management for SMEs offers you the tools to identify potential threats to your supply chain and establish measures to minimize their effects. This step is vital to ensuring business continuity and safeguarding your operations against global supply chain disruptions, giving you a sense of control and preparedness. 

Invest in digital tools that regularly analyze your processes, flag any issues, or implement new practices to bolster your existing risk management plan. Pay special attention to risks associated with your suppliers since they control the availability of raw materials vital to production.

Leverage technology and digital tools

Use automation and artificial intelligence technologies to make your supply chain operations and management more efficient and flexible. For example, advanced analytics tools can help you predict demand and optimize inventory levels, reducing the risk of overstocking or stockouts. The supply chain disruptions caused by COVID-19 encouraged industries to invest in these technologies. The companies that emerged unscathed from that crisis were, more often than not, the ones that already had advanced analytics capabilities. 

The post-pandemic world has also seen an increased adoption of other digital tools, such as performance management systems, network modeling tools, and logistics management software. These technologies offer greater visibility across your entire supply chain process, improve supply chain design, and help with planning and foresight. Equipped with these tools, you will have the adaptability and resilience to manage better unforeseen circumstances that could impact your operations.

Explore your financing options

Rest assured, several financing options are specifically geared to support every step of your supply chain process. Supply chain finance for consumer goods and small businesses benefits your cash flows and operations. As a buyer, it also helps you build stronger relationships with your vendors, thus ensuring excellent reliability for your procurement needs. This reassurance about the availability of financing options should make you feel secure and supported in managing your supply chain.

Distribution and logistics finance, another supply chain-specific financing option, helps optimize inventory management and sales processes. With this financing, your small business will get the support it needs to expand operations and increase value and profitability. Explore your financing options to reduce costs, manage cash flows, expand customer reach through increasing distribution channels, reduce delivery times, improve customer service, and stand out.

Final Thoughts

Today’s business landscape is uncertain due to a variety of factors, including geopolitical tensions, such as trade wars and political instability; technological advancements, such as the rise of e-commerce and automation; economic volatility, such as recessions and currency fluctuations; and environmental issues, such as climate change and natural disasters. As we learned from the COVID-19 pandemic, many of these factors could overturn global supply chains, and small businesses are the first to be affected. By building resilience and flexibility into your supply chain operations, you can shield your business from unforeseen disruptions and ensure its success even in turbulent times.

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Want to know more about fortifying your supply chain operations against uncertainty? Escalon has helped over 5,000 companies across a range of industries improve their compliance regarding internal controls and streamline processes. Talk to an expert today.


Devika Hastak
Devika Hastak

Devika Hastak is a dynamic content writer who is passionate about using the power of the written word to promote knowledge sharing and drive business success. She is adept at crafting compelling content tailored to client objectives and successfully executing SEO strategies that significantly impact brand awareness and lead generation. When she’s not wielding her digital pen, you can find her conducting culinary experiments in the kitchen or enjoying a good laugh with her family and friends.

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