Supply chains involve a complex network of resources, technologies, individuals, companies and activities that are dependent on one another. They consist of three main components:
- Planning and purchasing: buyers determine their supply and demand needs and place orders for products and materials.
- Warehousing and inventory management: enough inventory is stored and managed so orders can be efficiently filled.
- Manufacturing: raw materials are ordered and new products are made to replenish depleted supplier inventories after their orders have been filled.
These components aren’t always safe from outside disruptions, and if one fails or faces struggles, the entire supply chain network can be thrown into disorder.
Most businesses were underprepared for the massive supply chain disruptions triggered by world-changing events over the last few years. According to the PwC Digital Trends in Supply Chain Survey 2022, 64% of respondents are seeing the supply chain attributes, such as securing raw materials from suppliers, becoming major or moderate risks to the organizations.
Future-proofing the supply chain gives companies a moat against these global dynamics. To help e-commerce companies and retailers avoid potential supply chain challenges, here are four strategies that can be executed to improve supply chain planning.
1. Diversify Your Supply Chain
Broaden the range of sourcing, perhaps geographically, to increase choice and abundance within the supply chain. By developing multiple supplier relationships, it’s more flexible and easier to adapt to the constantly changing markets in different regions or countries, for example, during a prolonged pandemic that alters the entire global economy.
Many times, diverse sourcing is the key to a brand’s success, as it readily locates goods and materials while maintaining profits, growing customers and boosting innovation. Having said that, it is quite time-consuming to source suppliers that are trustworthy and the right fit for a company.
Retailers are essential to building a reliable and high-quality supplier network and meeting business needs with the lowest risk. A global B2B sourcing platform, such as Global Sources (GSOL), that connects over 10 million verified suppliers and qualified buyers, may help solve the challenge.
To help buyers further assess the capabilities of the suppliers they choose, GSOL provides basic supplier information and offers a 3D VR Showroom to verify supplier factories in order to glance at different supplier products and services without geographical limitations.
2. Unlock the Value of Data
Predictive analytics and advances in big data and robotics will significantly impact retailers. Data from the University of Texas–Austin suggests that a simple improvement in “data usability” can give some companies a 10% increase in revenue.
While data usability usually translates to improving sales and marketing processes, it can also provide more flexibility with supply chains. With the widespread application of automation, Big Data, AI, and other technologies on B2B sourcing platforms, the sourcing manager can make better decisions to enhance product offerings by evaluating the trends with the best market potential.
By leveraging AI capability, companies can get more precise and customized product recommendations, market intelligence with big data, matching services based on product attributes and high-demand product ranking.
3. Close Monitoring of Inventory
To succeed in the future, companies will need to address the entire equation: What are the most valuable choices you can offer your customers? What are their associated complexity costs? How might these be reduced?
To meet demand but avoid the risk of having to hold onto stock, it would be advisable to look for suppliers who have a low minimum order quantity (MOQ) service. This may be much more suitable for the current operation mode of retailers to quickly respond to the fast-changing trends when sourcing materials or products globally. The main benefit of a low MOQ is that retailers do not require so much working capital to pay for inventory and use a limited quantity to test the market preliminary. Therefore, buyers will likely improve inventory control and decrease purchasing costs in a more flexible sourcing experience.
4. Quick Response to the Demand
Poor supply chain management may lead to displeased customers or buyer experience. Seventy-six percent of B2B buyers expect more personalized attention from solution providers based on their specific needs, according to the DemandGen Report.
Due to the short-lived, fast-cycled environment in industries such as consumer electronics, gadgets, apparel and home design, businesses need tighter lead times to gain a competitive edge and satisfy customers’ expectations. Finding suppliers with the ability to deliver quickly can boost sales, meet customer needs, and expand the market share. It is also undoubtedly the controlling factor of a company's reputation and business development.
To gain the first-mover advantage, it is critical for buyers to place orders immediately with verified suppliers. For example, a “Ready to Order” feature where you can see verified suppliers who stock materials ready to be shipped is going to help reduce the time between inquiries and delivery. This, in turn, provides a faster turn-around time for buyers. With the feature “Request for Quotation,” the sourcing manager can ask for quotations from different vendors with customized requirements to gather the bids in a formal, structured and comparable way.
Future-Proof Your Supply Chain
Companies venture to gain a buffer against most changing global dynamics by future-proofing their supply chains. The strategies – supplier diversity, predictive analysis with big data, close inventory monitoring, and quick response to market – have the ability to help most businesses move forward post-pandemic and grow to meet the evolving needs of customers and the market.
