Are These Threats About to Disrupt Your Supply Chain?

Your supply chain doesn’t have to be big and complex for it to face threats. These threats to your business not only disrupt your supply chain, but also impact your profits.

According to an analysis by Industry Week, disruptions in the supply chain can cut a company’s share price by seven percent.

Impact of Supply Chain Interruptions

Failures in your company’s supply chain can cause major and minor delays. But they also leave behind some form of damage, including:

- <span style="font-family: 'Courier New'">Financial losses;</span>
- <span style="font-family: 'Courier New'">Harm to your company’s reputation;</span>
- <span style="font-family: 'Courier New'">Stoppage along the supply chain;</span>
- <span style="font-family: 'Courier New'">Customer service delays;</span>
- <span style="font-family: 'Courier New'">Lower customer satisfaction.</span>

Top 3 Threats

Although some threats may be out of your control, most can be mitigated if you plan ahead for them. For example, by being proactive, your business can eliminate these top three threats to its supply chain.

1. Cost Instability

There’s no getting around it, prices fluctuate. Whether it’s the cost of raw materials to make your product, increases in manufacturing it, or a hike in distributing it, these unpredictable costs can really play havoc on your bottom line.

For example, many businesses experienced a deep cut in their bottom line due to unstable fuel costs over the past few years, paying added surcharges to accommodate increased gas prices.

2. Labor Concerns

No matter the type or size of your company, labor is the biggest variable cost. Changes in the minimum wage and raises based on wage agreements can be planned, but not employees who leave and have to be replaced with someone at a higher salary.

At any point in time, some businesses may face labor shortages, labor strikes, or work stoppages at their own company or a vendor within their supply chain. Companies are also threatened by striking carriers or cargo workers, leaving their products stranded for a significant amount of time and halting their business operations.

3. Natural or Man-made Disruptions

These unforeseen, unplanned threats can blindside any business and cause a major disruption to all or part of the supply chain. Just about any circumstance would fall under this threat, such as:

- <span style="font-family: 'Courier New'">Natural disasters, such as flooding, hurricanes, earthquakes, tornadoes, etc.</span>
- <span style="font-family: 'Courier New'">Political unrest;</span>
- <span style="font-family: 'Courier New'">Violent uprisings in a city, region, or internationally;</span>
- <span style="font-family: 'Courier New'">War.</span>

How to Build Supply Chain Resilience

The key to building a supply chain that is resilient to the threats of cost instability, labor concerns, and natural or man-made disruptions is to actively manage the supply chain risk. Here are some steps to take:

- <span style="font-family: 'Courier New'">Develop a risk management plan that addresses the major threats to your company.</span>
- <span style="font-family: 'Courier New'">Think outside the box so you’re not doing the same thing as every other company in a similar situation. This way, your business will recover faster from the economic or social impact.</span>
- <span style="font-family: 'Courier New'">Build flexibility and responsiveness into your supply chain strategy.</span>
- <span style="font-family: 'Courier New'">Share the plan with all employees, outside vendors, and any other enterprise that does business with or has a relationship with your company.</span>
- <span style="font-family: 'Courier New'">Enhance your sharing of risk identification data and response protocols among all supply chain contributors.</span>
- <span style="font-family: 'Courier New'">Use your IT systems to your advantage by utilizing scenario modeling and pre-programmed responses.</span>
- <span style="font-family: 'Courier New'">Implement exercises to test your plan.</span>

Adding a 3PL to Your Supply Chain

Partnering with a third-party logistics (3PL) provider, like Brendamour Warehousing, Distribution & Services, can help your business mitigate the top three risks by providing alternatives that will keep your supply chain moving smoothly.

With our state-of-the-art warehouse management system and network of truck, air, train, and ship carriers, we can organize your supply chain to deliver the maximum intended value.

Every business has a different supply chain, which is why Brendamour caters to that diversity with a wide range of logistics services to help you build resilience into your supply chain.

When supply chain disruptions occur, your company will be ready to respond with effective measures to address them. With Brendamour Warehousing as your 3PL, your company is on its way to having the best supply chain infrastructure in place to prevent the loss of market share to competitors unaffected by the disruption.

To get started with your supply chain evaluation, simply contact Brendamour Warehousing, Distribution & Services today.