Supply chain disruption doesn’t have to be a disaster

When your logistical planning has paid off and the supply chain is running smoothly, there aren’t many reasons for concern regarding the unlikely event of a disruption. However, no one wants to experience that sinking feeling when a crisis threatens to bring massive losses.

Weather and climate-related disasters alone have caused $2.4 trillion in economic losses over the past 45 years—and that doesn’t include other events like union strikes, national holidays or workplace accidents.

While the idea of your supply chain shutting down can send you into a panic, we believe in fixing problems before they arise. Here are six tips for keeping your cool in a supply chain meltdown.

Have a response plan

While a tornado may seem an unlikely event for rural Victoria, recent events have demonstrated that even the seemingly impossible can occur—and bring with it major disruptions. As we move into bushfire season, it is also important to consider all types of natural disasters and their subsequent effect on our roads and infrastructure.

Rather than dismiss the likelihood of a potential disaster, ensure a plan is in place for every contingency. A clear, detailed guide for how the company should act in the event of a disaster will result in focused personnel who can work efficiently to get the supply chain back up and running as soon as possible.

Encourage crisis training for leaders

Your response plan will run even more smoothly if your management team knows exactly how to respond to a crisis. East West Manufacturing cites research by Dr. Arash Azadegan of Rutgers University that suggests leaders must first respond in a direct and decisive manner. Then, as the emergency escalates, a more flexible approach is required to implement the best possible solution.

A workplace that enables its leaders to develop the appropriate skills for the management of a supply chain crisis will discover that operations return to normal much quicker than those who leave their employees to sink.

Keep calm and assess the damage

You cannot mitigate the losses that come along with supply chain disruption without first making a solid assessment of the damage. Don’t be afraid to report significant losses to your superiors—the full scope of the situation needs to be understood before action can be taken.

Remember the bigger picture

When assessing the damage, it’s easy to fall into a pattern of consolidating only the problems that directly affect you or your workplace. However, supply chains are a delicate balancing act of different needs—from the beginning right through until the end of the chain. Therefore, what appears to be a minor problem on your end could be catastrophic for someone down the chain. Remember to consider your place as part of a whole network, as well as an individual workplace. Direct communication between those responsible for every level of the chain is essential for getting the supply chain back to maximum efficiency.

Backup your suppliers

We all have our favoured suppliers—the ones who know the way our business runs and have adapted to work with us. However, it’s easy to fall into a comfortable trap and not take contingency plans into account. An external crisis is easy to adapt to when you have multiple suppliers on hand. While those who value loyalty may baulk at such a step, this is a necessary part of the business to ensure that your eggs are not all in one basket.

Take a proactive approach

The best leadership teams are flexible and can learn from their mistakes. The response to an unexpected crisis can tell you a lot about your supply chain and the weaknesses within it. Instead of responding with panic or anger, use each crisis as a learning curve. Implement strategies to ensure that you are never hit with the same disaster twice and your supply chain will be just fine.

Learn more about our leading online Master of Supply Chain and Logistics Management program by getting in touch with an admissions manager today on 1300 701 171.