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Strategies for Effective Supply Chain Management
June 22, 2023

Strategies for Effective Supply Chain Management

The lockdowns during the COVID-19 pandemic and the recent economic uncertainty demonstrate that business supply and demand can change at a moment’s notice. Furthermore, poor supply chain management can result in the underproduction or overproduction of products. According to a report by manufacturing company Avery Dennison Corp, approximately $221 billion worth of inventory is discarded each year due to expiry or overproduction. Therefore, it’s crucial for businesses—especially small and medium-sized ones—to have a sustainable strategy for managing where, when and how they will secure business-critical resources.

A supply chain comprises suppliers, manufacturers, distributors and consumers. With several entities involved, it’s no wonder that chains occasionally break down and impact businesses. Fortunately, a solid supply chain strategy—an organization’s detailed plan to manage the flow of goods and services—can help you keep production on track.

Consider the following guidelines when implementing a supply chain strategy:

  • Forecast demand. Avoid the perils of overstocking by leveraging market research and sales data to determine what products need stocking and how much to stock. For new lines of business, consider stocking a simple variety of offerings to build upon over time.
  • Consider a supply chain partner. Weigh the benefits of a supply chain partner who supplies products using complete end-to-end solutions. Make sure any chosen partner can grow as the business expands.
  • Increase supply chain visibility. Monitor the supply chain and proactively fix issues to ensure products reach consumers as expected. Consider supply chain management software solutions that facilitate real-time tracking.
  • Diversify the supplier base. Engage multiple suppliers—ideally in different locations—to help spread risks and increase supply chain resilience.
  • Plan for worst-case scenarios. Conduct a supply chain risk assessment to identify potential flaws, then implement measures to remedy these. Additionally, develop a business continuity plan to prepare for future disruptions. This plan should include information on secondary suppliers and other backups.

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