How to avoid supply chain disruptions in the foreseeable future

How to avoid supply chain disruptions in the foreseeable future

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Companies that diversify their logistics and use alternative routes overcome many supply chain problems.

In supply chain management, disruption within a path of a given transport mode can notably affect the entire supply chain and, from time to time, even bring it up to a halt. As such, business leaders like P&O Ferries CEO and Maersk CEO work hard to add flexibility into the mode of transport they depend on in a proactive way. For instance, some companies utilise a flexible logistics strategy that utilises multiple modes of transportation. They encourage their logistic partners to diversify their mode of transport to incorporate all modes: trucks, trains, motorcycles, bicycles, vessels as well as helicopters. Investing in multimodal transportation practices like a combination of train, road and maritime transport and also considering different geographic entry points minimises the vulnerabilities and dangers related to depending on one mode.

In order to avoid incurring costs, different companies start thinking about alternative roads. For instance, due to long delays at major worldwide ports in some African countries, some businesses urge shippers to build up new paths as well as conventional roads. This tactic detects and utilises other lesser-used ports. Rather than depending on a single major commercial port, when the shipping business notice hefty traffic, they redirect goods to more effective ports along the coast then transport them inland via rail or road. In accordance with maritime experts, this tactic has its own advantages not only in alleviating stress on overrun hubs, but also in the economic growth of emerging areas. Company leaders like AD Ports Group CEO would likely accept this view.

Having a robust supply chain strategy will make firms more resilient to supply-chain disruptions. There are two types of supply management problems: the very first is due to the supplier side, namely supplier selection, supplier relationship, supply planning, transportation and logistics. The next one deals with demand management dilemmas. They are dilemmas related to product introduction, product line management, demand preparation, item rates and advertising preparation. Therefore, what typical methods can businesses adopt to improve their capability to sustain their operations when a major disruption hits? According to a current study, two strategies are increasingly appearing to be effective whenever a disruption happens. The first one is referred to as a flexible supply base, and the second one is called economic supply incentives. Although many in the industry would argue that sourcing from the sole provider cuts expenses, it can cause problems as demand fluctuates or in the case of an interruption. Hence, depending on numerous companies can reduce the risk related to sole sourcing. On the other hand, economic supply incentives work whenever buyer provides incentives to cause more companies to enter the marketplace. The buyer will have more flexibility in this manner by moving production among vendors, especially in areas where there is a limited amount of companies.