Weak links in your supply chain can create many negative consequences when it comes to your bottom line. You need to know how to quickly identify and eradicate weak links to keep your business operating at its optimum potential.
As time goes on, supply chains of individual companies become increasingly more complex and involve more individuals and companies than ever before. Your supply chain might involve not only vendors, but also manufacturers, product distributors, service providers, transportation companies, and more. The job of keeping your supply chain operating efficiently may be getting more complicated as time goes on, Your challenge is to know how to recognize and correct weak links.
The best way to address weak links in your supply chain is to know how to recognize the most common symptoms. The following are four of the most common signs that your supply chain has a weak link that could be costing you a lot in lost profits:
A good organizational structure at a company is essential to weak links in the supply chain. If your company struggles from organizational issues, perhaps you should try downsizing and outsourcing some non-essential tasks to make it more easy for your company to manage its supply chain. Some possible services you can take advantage of include outsourcing procurement or working with a logistics savannah freight forwarding service provider.
Over-reliance on One Vendor
If you're working with only one supplier, you are setting yourself up for a lot of frustrations. Eventually, that one supplier is going to run out of needed materials. Or, your single supplier could suffer from events that disrupt the company like a strike or severe damage to a facility. A problem with one supplier could harm your company. Branch out and look for other suppliers as soon as possible to diversify your supply chain and have several options to fall back on should your main supplier become unavailable or unable to supply you with needed materials.
Long Distance Relationships
Ideally, a supplier should be close by to take some of the complication out of shipping matters. Suppliers located a long distance away may charge more for shipping. They also may be more difficult to communicate with. If your supplier or suppliers are located abroad, that further complicates the issue and makes you even more likely to suffer supply chain disruptions. While overseas suppliers or suppliers located far away may have better prices, look into the shipping charges that are added on. Also, you can calculate the loss you've suffered over time from receiving damaged product as well. You may find that, in the long run, finding a closer supplier will be better for your bottom and line and will also make your supply chain more dependable and eradicate weak links.
Falling Behind on the Technology Curve
Your IT capabilities are an important considerations to take into account when you're evaluating your supply chain and determining whether or not it suffers from any weak link. Outdated technologies for managing orders and maintaining customer and vendor data can leave you open to the possibilities of data breaches or large scale file loss that could be detrimental to your company. The best way to figure out if your technology is outdated is to rely on the services of an IT consultant specializing in logistics to see if you can benefit from any new technologies or services that you don't already take advantage of like freight forwarding or cloud storage of company information.