How to Manage Supply Chain Disruption and Risk

Supply Chain Disruption hero

The Covid-19 pandemic continues to shock supply chains globally for both eCommerce merchants and consumers. Now more than ever, it’s vital to manage supply chain disruption and protect your business from external interference while keeping up with changing purchasing habits.

According to Ernest & Young, 72% of businesses said Covid had a negative effect on their supply chain. 

It’s crucial for businesses to invest time and resources into managing future disruption in their supply chains. We’ve broken it down into five clear steps that help increase transparency to help you stay ahead of the curve. 

  1. Make sure delivery times are achievable
  2. Communicate with stakeholders, promptly and clearly
  3. Research changing customer habits
  4. Invest in technology and;
  5. Think local

Here are five ways to manage supply chain disruptions for your business and customer base:

1. Make sure your delivery times are achievable

Make sure all delivery information for customers in all of your messaging is not only up to date, but achievable. Delivery can make or break your customer experience, so it’s vital to manage expectations from the beginning of the purchase process. If there are delays from your supplier or in the last-mile process, make sure you let your customers know. Consumers expect more flexibility now than ever. Offer multiple shipping options across the entire delivery process, from selecting sustainable packaging or a specific window for their package to be delivered.

According to HiveLife, online retailers have been driven by customer expectations to provide faster, on-time delivery in order to remain competitive. There will always be times where events beyond your control can cause delays, but by managing expectations you will end up better in the long run.

 

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2. Communicate with your stakeholders, promptly and clearly

Whether it’s your suppliers, last-mile delivery partner or other wholesalers, now is not the time to go quiet! Check in with a phone call or message that can instantly clear up uncertainty regarding delivery, product, risk or disruption. If there are any issues, the sooner you are aware, the sooner you can find and implement solutions. Make sure you are also easily contactable.

Regular communication can help you identify any broken links in your supply chain. Check with your supplier that they can still deliver their goods and services and be ready to consider alternatives. Stay up to date with the carriers you partner with and any Covid impacts.

3. Research changing customer habits

Disruption is caused by new, typically unplanned behaviours. Allocate time to keep on top of emerging customer behaviours. Learn how category leaders are responding to supply chain disruption. With greater media buying power and reach, larger brands often shape customer expectations by getting on the front foot with messages to customers, so review the market for models you can adopt.

Don’t discount the smaller brands in your research though. The #shoplocal and #buyfromthebush campaigns which became global movements during Covid were led by smaller brands with grassroots support and featured open, honest communications with their customers about the support they needed.

Accenture details how traditional retailers must out-manoeuvre uncertainty by creating new lines of service, including ‘Click and Collect’ and ‘contactless delivery’. With deliveries, consider offering delivery windows or premium user-pays services so your customers can choose an option with greatest transparency.

SKUtopia Same Day gives customers control over their delivery and overall experience, offering two delivery windows for customers in metro areas. Customers are demanding increased visibility and live tracking for packages to instil confidence in merchants and their brand.

4. Invest in technology

eCommerce founders and practitioners are always looking to hack their operations. Rapid advances in AI and machine learning pose a significant advantage to early adopters. There are a number of AI based inventory management tools and forecasting systems that can supercharge your workflows by offering insights to boost cost-effectiveness, customer satisfaction and retention. 

Modern AI forecasting tools analyse your data, allowing you to plan, stock and schedule your deliveries more efficiently. AI Inventory Management can minimize risks of mismanaging the stocking process to help you better understand customer demand. According to Supply Chain Dive, a recent survey found that 90% of respondents believe AI will transform supply chains for the better. 

Keep in mind, sometimes you just can’t explain human behaviour – remember panic buying? But in combining forecasting data with common sense and your own knowledge, you can effectively minimise risk and disruption in your supply chain.

5. Think Local

The pandemic still continues to disrupt international shipping today. Even Apple suffered shortages last year due to the temporary closure of its manufacturing plant in China. 

According to Freight Australia, international and domestic freight volumes were down by 23% and 16% due to supply chain disruption. By keeping as many aspects of your supply chain local, you can minimise future disruption.

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Consider rethinking your warehousing strategy with micro-warehousing. Instead of having orders shipped to warehouses far from CBDs, you can save time, resources and the environment by adopting a strategy where you store product in smaller facilities that are much closer to city centres and your end consumer.

Closer suppliers and less delivery also cuts down on ground transport and emissions, meaning less costs and sustainable operations.

Final Thoughts

The Covid-19 pandemic has illustrated that huge disruption can occur to supply chains and logistics, causing waves of complications long after the event. By keeping delivery times achievable, communicating with stakeholders, researching customer habits, using AI technology and thinking local you can prepare your business against future disruption, minimising risk. By instilling resilience into your supply chain, you can turn disruption into opportunity.

Riarne Gale
Riarne Gale

Riarne Gale is the Head of Content & PR at SKUtopia. She’s passionate about sharing great tips, resources and strategies for all things eCommerce, shipping and logistics.