WHAT'S CAUSING THE CURRENT SUPPLY CHAIN DISRUPTION?
There are several reasons why the world is experiencing a supply chain disruption in 2021, and possibly into 2022. If you remember the panic toilet paper buying when the pandemic hit, in a way this became a trickle-down effect.
That’s because supplies began panic buying more materials than they needed to keep up with demand. This ranged from all kinds of items and materials, including plastics, wood, and even soybeans. No matter what industry you are in, you are likely observing some effect of supply chain disruption and product shortage.
Production in China slowed down during the height of the pandemic. Serving as the world’s factory for nearly all everyday items (and much more), availability for materials came to a screeching slow down.
Meanwhile, the current shortages are also causing price inflation. As the global economy works to recover from the pandemic, businesses and customers alike are feeling the crunch.
HOW IS THE DISRUPTION AFFECTING ECOMMERCE?
Product shortages are causing problems ranging from dissatisfied customers to having a plan for an economic downturn.
The disruption is forcing ecommerce brands to predict how customers and even your competitors may respond to economic downturns. It’s also making brands look into alternative suppliers and devise a plan of how to get what they need.
However, the effect of the disruption isn’t entirely negative. The disruption presents an opportunity for some or all the following:
No matter the positive or negative effects of the disruption, here is how you can start handling shortages.
WHERE TO START WITH HANDING SUPPLY CHAIN DISRUPTION
Ecommerce is incredibly competitive, and having a plan on how to handle disruptions can save your sales as well as your reputation. However, brands must face reality that this disruption is likely going to last for quite a while. Without a plan, you’re sailing on a sinking ship.
Consider Your Inventory
The first approach is looking at your current inventory. What do you currently have that you can ship to customers quickly and affordably?
This is the time to start stockpiling on items needed for inventory. Imagine what you would need if your supply chains were entirely unavailable to you. Even though there is likely going to be a wait, put your orders in as quickly as possible to build up inventory. This way, you won’t be caught unprepared or unable to supply customers with what they need.
Get a Backup Supplier
There’s no better time than now to consider a backup supplier. What other suppliers can you reach out to for fulfilling inventory needs? You might need to consider new suppliers from other corners of the globe to help bring in new inventory.
Partner with Logistics Professionals
When you’re having trouble determining the logistics of low (or no) inventory, it can pay to partner with the professionals. They can potentially help you find new sources of inventory that you may have otherwise overlooked.
Create an Emergency Plan
Consider what you will do if there is no inventory available to buy. This will be part of your plan of action to stockpile what you need. However, you’ll also need to consider how you will communicate emergency plans to customers.
Customer communication is a major aspect of surviving a supply chain disruption. In part II, we’ll show the best practices of customer communication during a supply chain disruption---a big key to surviving the uncertain.