Supply chain disruptions can be a huge headache for businesses of all sizes. When your supply chain is disrupted, it can cause delays in production, missed deadlines, and lost revenue.
According to the Australian Bureau of Statistics, more than two in five Australian businesses (41%) faced supply chain disruptions in the last year. This has remained steady since it peaked in January 2022 (47%).
If you’re affected, there a few things you can do to help weather the storm.
What is causing these supply chain disruptions in Australia?
Supply chain disruptions have been a global issue since the pandemic started in 2020. Currently Australia is experiencing issues with driver shortages, logistics provider capacity issues, inflation, shipping delays, increased freight costs, depleted inventory levels, labour shortages and demand peaks are all driving discussions and requiring attention.
Unfortunately, these supply chain difficulties are expected to last into 2023, according to a survey of Australian businesses. So what can you do to manage supply chain disruptions in your business? Here are five ways to manage disruptions in your business:
1: Develop a good relationship with your suppliers
Building a good relationship with your suppliers is essential for managing disruptions. When you have a strong relationship with your supplier, they are more likely to go above and beyond to help you during difficult times.
It’s important to nurture these relationships all year round, not just when you need them. By maintaining open communication channels and being proactive about potential problems, you can build a strong foundation for dealing with disruptions when they occur.
If you don’t have time to develop relationships with all of your suppliers, focus on developing relationships with key suppliers who provide crucial components or materials for your business.
And remember, it’s not all about price. Developing a relationship with a supplier who is more expensive but always delivers on time and provides high-quality products can save you a lot of headaches (and money) in the long run.
2: Have a Plan B (and C, and D…)
No matter how strong your relationships with suppliers are, there will always be a chance that they can’t meet your needs during a disruption. That’s why it’s important to have alternative suppliers lined up who can step in when needed.
Of course, finding alternative suppliers is only part of the solution. You also need to have systems and processes in place so you can quickly switch to using them without missing a beat.
This might mean having extra inventory on hand, or making sure you have the necessary paperwork and approvals in place before a disruption occurs. By being prepared, you can avoid disruptions to your business operations even when your primary supplier is facing difficulties.
3: Use technology to your advantage
Technology can be a powerful tool for managing disruptions in your supply chain. By using technology, you can automate processes, keep track of inventory levels, and quickly find alternative suppliers when needed.
There are many different software solutions available that can help you manage your supply chain. Look for a solution that fits the specific needs of your business and that is easy to use so you can get started quickly.
In addition to finding the right software solution, make sure you have a clear understanding of how it works and what it can do for your business before a disruption occurs. This way, you’ll be able to put it into action quickly when problems arise.
Technology is constantly evolving, so it’s important to keep up with the latest trends and developments. By staying up-to-date, you can make sure you’re using the best possible tools to manage your supply chain.
4: Be proactive about potential problems
When it comes to disruptions, an ounce of prevention is worth a pound of cure. By being proactive and keeping tabs on potential problems, you can often avoid disruptions altogether.
For example, if you know that one of your suppliers is facing financial difficulties, you can start looking for alternative suppliers before they’re unable to meet your needs. Or if you’re having difficulty getting raw materials from one supplier, you can switch to another supplier before your inventory levels run too low.
By taking action early, you can avoid major disruptions and keep your business running smoothly.
5: Have additional stock on hand
If a disruption does occur, one of the best ways to deal with it is to have additional stock on hand. This way, you can keep your business running while you work on finding a solution.
Of course, having extra inventory comes with its own set of challenges. You need to have enough space to store it, and you also need to be able to finance it. But if you can manage these challenges, having additional stock on hand can be a lifesaver during a disruption.
6: Ensure you have additional funds available
Another way to prepare for supply chain disruptions is to ensure you have additional funds available. This can give you the flexibility you need to make changes to your operations or find alternative suppliers.
The best option for your business will depend on your specific circumstances. But by having additional funds available, you can be prepared for anything that comes your way.
OnDeck is a lender that can provide you with a working capital loan, if you need to purchase additional stock up front so avoid supply issues down the track. We offer loans of up to $250,000 and terms of up to 24 months, so you can have the flexibility you need to keep your business running.
To learn more about our loan application process, contact us today.
By being proactive and using technology to your advantage, you can minimize the impact of disruptions and keep your business on track. So don’t wait until a problem arises – start preparing today.
Prepared by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215 (“OnDeck”) for general information purposes only. Content may belong to or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. Information current as at October 2022. You should not rely upon the material or information as a basis for making any business, financial or any other decisions. Loans issued in Australia are subject to the terms of a loan agreement issued by OnDeck. Loans are subject to lender approval. OnDeck® is a Registered Trademark. All rights reserved.