The global supply chain has seen major change over the past several years, leaving warehouse managers scrambling to figure out how to maintain their operations at a reliable pace. Customer demand has shifted, artificial intelligence has gained prominence, and political uncertainty has left supply chain workers wondering how their industry will be affected in the long term.
Not to mention the global pandemic that recently caught everyone by surprise, it’s easy to imagine what this did to distribution operations worldwide.
Navigating these supply chain bottlenecks can be tricky if you don’t know how to lead your business through ever-changing market trends, trade disruptions, and higher consumer expectations. In this article, we’ll unpack what a supply chain is, provide examples, and discuss the key elements that make up an effective supply chain.
We’ll also focus on how to navigate the issues you’ll face as it pertains to warehouse supply chain operations. As a warehouse manager, these tips will help ensure your manufacturing capacity stays high, allowing you to be one step ahead of supply chain disruptions that will inevitably impact your business.
So, what are supply chains?
A supply chain can be viewed as the journey raw materials go on before they’re developed into a product and distributed worldwide. These materials will make several stops along the supply chain, entering different production facilities and refinement centers before being distributed to the end consumer.
You can also view the supply chain as an interconnected network of organizations, manufacturers, producers, and consumers—all working together to create the sale of a product or service.
However you prefer to view the supply chain, three main players will always be involved: suppliers, producers, and customers.
Supply chain management, or SCM, is an important term to understand if your operations are directly related to supply chain networks. In its most basic form, SCM is the process of overseeing the entire supply chain process—from when a shovel breaks ground to when the customer purchases the product and every step in between.
The job of a supply chain manager is to ensure all phases of the supply chain journey are operating as expected. They oversee inventory management logistics, meet deadlines, reduce costs, and prevent supply chain shortages. They are keenly tuned to customer demands and seek the next competitive advantage to capitalize on the shortcomings of their competition.
Supply chain issues occur when managers cut corners. Generally, there are five key components to monitor to ensure a resilient supply chain. Mastering these five components will significantly impact how well your operation performs and ensure a smooth workflow.
The first component of supply chain management is the planning phase. This is the phase where you will identify business growth opportunities. Consider what resources the company currently has and weigh that against the resources it’ll need in the future. Evaluate supply and demand for your product or service.
This is the phase where you will likely determine if you need to outsource to meet customer needs or if you can get by with manufacturing the materials yourself. The overall goal of the planning phase is to help make informed decisions.
The sourcing phase is when supply chain managers determine how exactly they’re going to procure their desired materials. Depending on the goals you’re trying to accomplish, this phase can be the most costly phase of the five. Conversely, this phase also offers plenty of chances to achieve cost savings.
Supply chain managers should thoroughly research the suppliers they’re bringing into the fold. Partnering with a reputable supplier will grant you peace of mind regarding order fulfillment, allowing you never to worry about supply chain disruptions.
In the distribution phase, supply chain managers deliver the finished product to the customer. SCMs are mainly concerned with the logistics of delivery, working to maximize the customer experience and achieve cost savings whenever possible.
The most effective supply chain managers consider all the factors that may impact product distribution, including weather forecasts, global economic activity, fuel costs, and others.
The final component in resilient supply chains is the return phase, also known as reverse logistics. Various factors lead to a consumer wanting to return a product or service, but whatever the reason, it’s a supply chain manager’s job to ensure this process goes off without a hitch.
While no company wants their product to be recalled or returned to them, building an easy-to-understand return system will go a long way toward improving the customer experience.
A supply chain disruption is any event or circumstance that negatively impacts the sourcing, production, or distribution of a good or service. A disruption can be minor, such as rising energy prices, or it can have a much more lasting impact on the supply chain, like an unexpected natural disaster.
Managing supply chain disruptions is one of the biggest challenges warehouse managers and logistics professionals face.
Supply chain disruptions come in many forms. While some issues can be avoided through proactive backup planning, some are impossible to predict. Here’s a list of the most common factors causing supply chain issues:
Whether you’re a Fortune 500 company or a startup, one of these things will inevitably happen to you. Effective supply chain management is not trying to run away from these occurrences but learning how to adapt to them while maintaining operational efficiency.
Warehouse managers play a pivotal role in the supply chain process, as they are in charge of overseeing and optimizing the day-to-day operations within a warehouse. A warehouse manager’s job is to streamline the production process as best as possible, considering factors like inventory space, order fulfillment, and warehouse design.
Any of the examples we previously discussed can impact the supply chain. You may be forced to find a different supplier, cut down on spending, hire a third-party distribution company, etc. This is why we’ve seen a rise in prioritizing supply chain resiliency.
Being unprepared for global supply chain issues will not only directly impact your internal operations but also change your business’s external image. Customers and potential partners will view you as an organization that couldn’t adjust to hardship.
Most warehouse managers and SCMs know they will face a supply chain disruption at some point. The key is having contingency plans in place, so you can be thoroughly prepared to face these challenges. These plans should model worst-case scenarios for potential ‘What if?’ events, enhancing both upstream and downstream visibility.
For example, if you suddenly face a shortage of raw materials or a significant cost increase, having these plans allows you to assess and mitigate impacts on your inventory quickly. This strategic foresight ensures that disruptions are managed effectively and are only temporary setbacks.
The most well-prepared warehouse managers can remain calm in a time of adversity. This sense of calm will rub off on your employees, stakeholders, and partners, giving everyone more peace of mind. Here are some key practices that will keep you productive during a supply chain crisis.
Optimize inventory management: Implement advanced inventory management techniques to maintain a balance between overstock and understock situations. Utilize predictive analytics to forecast demand more accurately and adjust your inventory levels accordingly. This proactive approach helps in avoiding both excess inventory costs and potential shortages.
Monitor consumer behavior: Supply chain disruptions can change the entire mindset of consumers. New trends are always born out of adversity. Capitalize on these changing trends to overcome your supply chain issues.
Embrace real-time visibility tools: Real-time tracking and visibility tools allow you to pinpoint the root cause of your supply chain issues quickly and efficiently. They allow you to map out the entirety of the supply chain, giving you additional insight into partner operations. Areas of visibility typically include:
So much of navigating roadblocks in supply chains is being proactive during your planning phase. Choosing the right partners, evaluating market trends, leveraging machine learning, and developing a backup plan (or two) will all have a significant impact on how well you can navigate supply chain issues.
Remember that headaches are always going to arise at some point. Instead of running from these challenges, embrace them head-on.
The yard is a critical component of the warehouse, yet warehouse management systems, transportation management systems, ERP systems, and track-and-trace capabilities tend to dominate supply chain priorities. Vector’s advanced yard management solutions bridge critical visibility gaps, ensuring your facility remains agile and responsive. Vector not only streamlines communication with suppliers and customers but also minimizes face-to-face interactions, facilitating a more adaptable and uninterrupted operational flow during disruptions.
Digital workflows across the supply chain.
