Supply chain instability remains an evolving risk for manufacturers. Rising freight, high demand, raw material costs and slow deliveries continue to plague manufacturers, adding costs and creating nearly constant interruption. Meanwhile, driver shortages and congestion at U.S. ports have created transportation challenges that are expected to continue throughout 2022.
As a result of supply chain instability, manufacturers may experience:
Lost revenue from unfulfilled orders
- Low Inventory
- An inability to complete orders
As supply chain risks continue to evolve, manufacturers can proactively minimize the impact on their business with the following practices:
- Increase inventory. Manufacturers should take steps to increase their inventory whenever possible. This may include stocking up on popular items when they become available, searching for discounted items to purchase, expanding storage capacity or outsourcing storing, packing and shipping solutions.
- Track inventory. With supply shortages, it’s essential for manufacturers to know what is in stock and which items need replenishing. By keeping track of stock, manufacturers can avoid running out of items at inconvenient times.
- Be transparent. To avoid surprising customers with long delays, be transparent about supply chain issues. Explain that some products may be delayed or take longer to ship than expected. If manufacturers are having trouble with certain products, they should inform customers that there may be additional wait times before they make a purchase.
- Adopt technology. With workforce shortages, the latest automation software can help manufacturers efficiently track and manage their supply chain. Relying on the latest technological solutions can also help create flexible responses to potential disruptions as well as improve supply chain visibility.
- Diversify the supply chain. Proactively research available product replacements and alternate suppliers. Search for suppliers in different geographic locations to minimize the impact of natural catastrophes, diseases or other external factors on the supply chain.
- Boost employee incentives. With a record number of unfulfilled jobs, manufacturers may want to consider raising pay and adding employee incentives. Such incentives may include flexible work hours or a hybrid work environment.
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