Overcoming Current Supply Chain Challenges: Strategies for Success

Today’s supply chains, longer and more complex than they were decades ago, are increasingly susceptible to disruptions. Natural disasters, geopolitical issues, supplier bankruptcies, global pandemics, and other seemingly unrelated events around the world can collide to significantly disturb the movement of raw materials and finished goods, threatening your business’s sustainability.

In a world that continues to get riskier, it’s vital you as a supply chain leader prepare for the future. Your organization needs to shift from just trying to stay afloat to building a growth mindset. To help you get back on the right track, we compiled our top strategies for proactively managing supply chain volatility and disruptions effectively, so you can optimize your processes for resilience.

The Current State of Supply Chain

Though supply chains have made notable strides towards recovering from the worst of the COVID-19 pandemic, there are still plenty of challenges looming just over the horizon.

Economic activity in the U.S. manufacturing sector contracted in May for the seventh consecutive month, indicating a deceleration of growth and an increase in uncertainty. In addition, the freight market continues to soften, bringing the Logistics Managers’ Index (LMI) to a new all-time low of 47.3 in May–down 3.6 points from April’s reading of 50.9. This is the first time in LMI’s 6.5-year history it has moved into contraction territory, putting some industry leaders on edge.

Microchips and cement continue to hold the top spot for hardest products to come by, leaving manufacturers in quite the production pickle. These shortages could lead to disruptions and higher costs for the defense and agriculture industries, as well as federally funded infrastructure projects.

And don’t plan that summer vacation just yet. Airplane engine parts have also become increasingly scarce, potentially delaying the delivery of new aircraft and disrupting air travel.

Strategies for Addressing Supply Chain Disruptions

Develop a Risk Management Strategy

Obviously, supply chain disruptions can arise from a multitude of factors, so having a robust risk management strategy is crucial. To safeguard smooth operations and minimize potential disruptions, here are some common threats every organization should account for:

  • Demand and supply volatility: Analyzing and forecasting demand, managing supply fluctuations, and implementing effective inventory management will allow you to be proactive in this area.
  • Supplier risks: Assessing supplier stability, quality assurance, and capacity, diversifying the supplier base, and having backup suppliers.
  • Operational risks: Preventing production delays, equipment breakdowns, and quality control failures through maintenance programs, contingency plans, and employee training.
  • Transportation and logistics risks: Managing transportation delays, disruptions, and damage or loss of goods through reliable logistics partners, tracking systems, and insurance coverage.
  • Cybersecurity and data breaches: Protecting data, preventing cyber-attacks, and establishing incident response plans.
  • Regulatory and compliance risks: Staying updated on regulations, assessing compliance risks, and implementing compliance programs.
  • Natural disasters and geopolitical risks: In 2021 alone, the U.S. experienced twenty separate billion-dollar weather and climate disasters. Diversifying sourcing locations, establishing business continuity plans, and working with insurance providers will help mitigate the impact of such events.

Here are a few items to include in your strategy in order to mitigate risk:

  • Collaborative risk assessments: Conduct risk assessments in collaboration with key suppliers and partners to identify and assess risks collectively.
  • Dynamic contingency plans: Develop adaptable contingency plans that incorporate real-time data and triggers to activate specific actions or alternative strategies in response to risk indicators.
  • Supplier risk-sharing agreements: Establish agreements with strategic suppliers to share the responsibility and cost of mitigating specific risks.
  • Innovative supplier diversification: Explore innovative approaches to diversify suppliers, such as forming partnerships or alliances with complementary businesses in different regions or industries.
  • Early warning systems: Implement advanced analytics and monitoring systems to detect early warning signs of disruptions.
  • Supply chain transparency and traceability: Enhance transparency through technologies like blockchain for tracking and traceability, ensuring visibility into the supply chain.
  • Continuous improvement through feedback loops: Establish feedback loops with stakeholders to gather insights for refining and improving the risk management strategy.

By identifying, assessing, and mitigating potential risks proactively, you can minimize the impact of any


Improve Supply Chain Visibility

Lack of visibility within the supply chain can hinder effective decision-making and responsiveness during disruptions. Leveraging technology like the Internet of Things (IoT), radio-frequency identification (RFID), and blockchain can provide real-time data and visibility across the supply chain. Enhanced visibility enables proactive monitoring, quicker issue identification, and timely corrective actions. Nike is a great example of a company that emerged stronger on the other side of the COVID-19 pandemic through their use of RFID technology.

RFID, employing tiny radio parts in Nike’s footwear and apparel tags, automatically tracked every item they sold. Despite the massive disruptions in the supply chain at the time, Nike successfully tracked one billion units at 99.9% readability, enabling them to capitalize on market demand and optimize inventory visibility across retail stores. Nike’s approach provided a competitive edge in their supply chain, enabling accurate demand forecasting and efficient distribution for both Nike and its strategic wholesale partners.

Enhance Collaboration and Communication

Collaboration and effective communication are vital for mitigating disruptions across the supply chain, no matter the market—especially if you’re managing multiple inboxes at once. Recent data shows businesses experience up to a $1.2 trillion loss each year due to poor workplace communication.

By fostering strong relationships with suppliers, customers, and other stakeholders, you can improve transparency and establish efficient lines of communication. Regularly sharing information, conducting joint planning, and establishing contingency agreements can enhance your ability to respond swiftly when challenges arise.

Diversify Suppliers and Locations

Over-reliance on a single supplier or location can amplify the vulnerability of the supply chain. Diversifying suppliers and locations reduces the risk of disruptions caused by a single point of failure.

Take the global neon shortage caused by the Russian invasion of Ukraine last year for example. Around half of the world’s semiconductor grade neon, essential for the lasers used to make chips, comes from Ukrainian companies. Both firms shut down operations as Russia invaded, forcing manufacturers across industries to halt production. Now, both private companies and the U.S. government are scrambling to fund semiconductor projects stateside to meet demand.

Of course hindsight is 20/20, but it was unwise for the world to have all their eggs in one basket in the first place. It’s now abundantly clear working with multiple suppliers and establishing partnerships across various regions ushers in a more resilient and adaptable supply chain.

Optimize Inventory Management

Maintaining excessive inventory can lead to increased costs, while inadequate inventory levels can result in stockouts and lost sales. How do you find a balance? By implementing forecasting techniques, utilizing inventory management software, and streamlining processes, you can tightrope maintaining optimal inventory levels and minimizing the impact of disruptions.

For example, implementing inventory management software or warehouse management systems (WMS) can provide real-time visibility into your inventory levels, automate inventory tracking, and streamline processes. Here at OnTime Staffing, we provide personalized reporting. You gain access to data needed for your business to excel, ensuring maximum productivity while keeping oversight on retention, attendance, and overtime spend.

How OnTime Staffing (OTS) Minimizes the Impact of Disruptions

Rapid Response

When supply chain disruptions occur, time is of the essence. OTS provides flexible, scalable talent solutions fast, ensuring your business can quickly access additional staff to meet unexpected demand, keeping your piece of the supply chain pie moving smoothly. As an onsite solution, we’re available when and where you need us to meet your business requirements.

Specialized Talent

Certain disruptions necessitate specific skills or expertise that may not be readily available within your organization. The good news is OTS offers access to a diverse pool of candidates with specialized logistics and supply chain knowledge, experience with specific software or equipment, and other critical skills required to address unique challenges effectively.

Workforce Continuity

Disruptions can cause temporary staff shortages due to a wide variety of factors, such as illness or travel restrictions. Not to mention, peak seasons often bring increased stress, requiring additional staff to manage workload fluctuations. With access to our readily available workforce, you can maintain workforce continuity through peaks and valleys in demand.

Reduced Risk

Working with a staffing firm like OTS comes with certain advantages in terms of legal and financial responsibilities as well. We assume responsibility for workers' compensation, payroll taxes, and unemployment insurance for temporary employees, minimizing legal risks and reducing financial liabilities for your business, in good times and bad.

To effectively manage the risks brought on by our long and winding supply chains, your organization must establish and employ strong strategies that address both known and predicted supply-chain risks. Leaders should understand risk management involves more than just implementing processes and governance models; it requires cultural and mindset shifts, too. By adopting the approaches we’ve outlined, your organization can enhance its ability to mitigate supply-chain disruptions and crises while maximizing the value of its supply-chain strategies.

You don’t have to navigate supply chain volatility alone. Reach out to OnTime Staffing today, and together we’ll solve your hiring challenges and increase operational efficiency!


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