The world around us is changing rapidly and not always for the better …
Currently, we are facing increasingly gloomy days, what with the effects of the pandemic still hanging over us and now also the outbreak of war in Ukraine. Whilst some people may wish to bury their heads in the sand, for e-commerce businesses these events have dramatically changed the future.
The disturbances in manufacturing due to the pandemic already caused quite an upheaval in supply chains around the world. As if that wasn’t worrisome enough, the war between Russia and Ukraine brought with it sanctions that have had a major effect on more than 300,000 companies in Europe and the United States alone.
So how can e-commerce business owners ensure that they are better prepared for the darker days of supply chain troubles that are sure to come? The best offense is usually a good defense and the best defense you can have against supply chain woes is to be alerted to the fact that they do happen (and most likely will) and then to have a plan of action prepared beforehand.
The first step in your plan of action may be old-fashioned yet it is a sure fire way to success; that step would be to reduce and get rid of all unnecessary debt. In uncertain times you want to limit any unnecessary outflow.
Reduce Product Variety
The second step in your plan of action is to take a good look at your current product portfolio and endeavor to cut down on the number of products offered where necessary. Be aware that products with low volume and high variability will be the most problematic when it comes to supply chain.
Where possible, cut these products out or at least reduce them to a minimum. When sourcing products, especially in this day and age, it would be wise to try and find a source closer to home.
Source Local Where Possible
By sourcing a local supplier you will cut out the stress of having to deal with supply chain woes dramatically and this will leave you free to focus on more pressing matters that may arise.
Another benefit of sourcing products for your business locally is that it will create a more sustainable and environmentally friendly supply chain, which is what a lot of customers look for these days. By having products sourced locally you will cut out extended shipping times, which will lower unnecessary costs and this will increase overall profits.
Sourcing locally will also have the added benefit of cutting out on transport costs and it will aid the local economy which will have been impacted by the economic fallout of the sanctions.
That being said, though, you need to keep a list of suppliers in other locations as well, just in case you need a backup along the way. Be sure that you build a strong relationship with not only your local suppliers but also your backup suppliers, as this will ensure that you will always have friendly and prompt service. Building strong relationships with your suppliers will lead to smooth sailing during any dark and stormy days ahead.
Build Up Your Inventory and Diversify
Nobody likes to run out of something that they just can’t do without, so to prevent that from happening many people are stockpiling yet again. This impacts many businesses in that they run out of products and then get caught in the midst of disrupted supply chains.
To combat this issue you may want to think seriously about having a backup supply of the more popular items on your inventory. Where possible, endeavor to build up the supply of products or raw materials needed to supply future customers.
For an e-commerce store (and actually for any store) there is nothing worse than constantly having items marked “out of stock” and not being able to replenish them to keep up with customer demand.
Wherever possible — diversify.
Depending on the type of product you supply, you may want to make a list of raw materials in your inventory that can have more than one use. Should you have materials in your inventory that are no longer needed for one product, you could then put them to use somewhere else.
Be innovative in your approach.
Use Market Data and Risk Evaluation Tools
One way to prepare for the darker days of supply chains is to make use of technology — use risk evaluation tools or AI-enabled mapping and environmental analysis apps to keep abreast of any changes happening around the world. This will give you the heads up you need to stay ahead of the crises.
By using programs such as Geoquant or BitSight you will be able to take all the data into account and stay one step (or even two) ahead of any problems that could arise due to events taking place around the world. Use the data you accumulate to see the projected and current need in your field of business and then work to supply that need to grow your business.
The Long and Short of It …
At the end of the day all you can really do is prepare for what may come, and then take each day as it comes knowing that you have done all you can. And when the dark days do come you can ride out the storm with confidence.
Whilst dark days are looming, applying early, thorough preparation can help to overcome and conquer the supply chain challenges and continue to build your business.