4 Ways Retailers Can Navigate Mounting Supply Chain Challenges
While countless retailers are mourning the loss of business productivity during the COVID-19 crisis, there are many sellers lucky enough to still be experiencing consumer demand for their products. These businesses are working hard to manage current supply and demand, but are significantly limited by a host of global supply chain challenges.
Threats to sourcing, fulfillment and production have placed extreme stress on the supply chain worldwide. In light of new exporting rules and customs slowdowns, retailers are struggling to secure the right raw materials for their products. They must also contend with highly limited production operations as factories experience full or partial shutdowns, as well as fulfillment barriers that force consumers with long waits to receive their products.
Based on our own first-hand experiences with many of these supply chain challenges during the pandemic, we wanted to share the following learnings to help retailers stay afloat now and in the months to come:
Now is the time to put full contingency plans in place for every single aspect of your supply chain. It’s safe to assume that many of your suppliers, manufacturers, and fulfilment partners will experience their own issues in the months to come, so building redundancies today will help you put your business in a better position to handle short-term and long-term threats.
2. Leverage relationships
If there was ever a time to canvas your contacts to call in favors and develop new relationships, that time is now. It’s perfectly OK to rely on your existing relationships to help you manage the most damaging breakdowns in the supply chain. You never know who will have an “in” that will help you secure a “win.”
Now is also a good time to take a close look at your existing supplier relationships to determine which ones will be able to support your supply chain needs for the long haul.
The challenges surrounding raw materials procurement and importing are not going away anytime soon. If your business has enough capital to commit to meet continued demand for manufacturing and production, you should consider shoring up enough materials to produce extra inventory. If this is the case, there are many low interest rates and inventory financing options that can help your business stay ahead of the curve.
4. Rethink distribution channels
At the current time, fulfillment centers like Amazon are focusing on distribution of essential products, but these restrictions won’t last forever. That is why it’s a smart time to explore additional distribution opportunities that will help your business continue to place your products in the hands of consumers who want them.
Right now, retailers are in the acute phase of the supply chain fallout, which necessitates immediate response and action. While you respond to today’s climate, thinking strategically about the long-term health of your supply chain needs will help your business stay strong and nimble, long after the pandemic dies out.
Colin Darretta is CEO of Wellpath