You’ll never know when a natural disaster, financial problems or delays can clog your supply chain. Such instances may make it difficult to restock on inventory or sell enough products to customers. You’ll need to have a strategic supply chain management plan to prepare your small business for possible disruptions.
Here are ways that can help you manage supply chain disruptions.
When a disruption happens, it’s up to you as an owner to communicate with customers. Craft a message that conveys the cause of low or out of stock products to customers. Be clear and concise when communicating with them. Your customers will understand the situation. You can post this message in your social media accounts or through email. You can also respond to phone calls if customers call about their orders.
Now that you know communication is an important aspect of a strategic supply chain management plan, you should use one consistent voice across all platforms. Be the source of calm within your organization. Your confident demeanor settles the worries your employees might be feeling about the disruption. Consistency in voice allows you to convey the message you want to both customers and suppliers. There’s less confusion and better understanding of the situation.
Make an Inventory Forecast
Supply chain disruptions will have a negative effect on inventory. You might run low on stock and may not be able to sell enough products to customers. In such cases, you must manage the demand of customers. Conduct a forecast of how much longer you can maintain sales at the current stock you have. Be ready to communicate with customers about possible changes in prices because of low stock or if an item is no longer available. Avoid invoicing mistakes and adjust sales targets because of the supply chain disruption. These keep your accounting books updated with the right financial data.
Create a Map of Supply Chain
Identify the disruptions in your supply chain. This means determining the location of your purchases and how long they’ll stay there or if they are damaged already. Map the location of other suppliers where you can get the materials and inventory you need. Consider the importance of a material in the production of the items you need. Can you buy it elsewhere or is there a limited number of suppliers making it? You also have to monitor a supplier’s quality control and if there is a possibility that they may use fakes.
Flexibility is important in handling supply chain disruptions. Determine supplier locations where it’s possible to find alternative transport. Identify the costs of accepting slower delivery times. Communicate with suppliers to create a schedule all parties can agree on.
Assess Cash Flow
Delays and disruptions in your supply chain will have a negative effect on your cash flow. Assess your finances to determine if you need extra resources to maintain operations. Adjust your budget to direct funding to aspects of your small business that may need it. This is when an emergency fund may come in handy. Set money aside for situations such as supply chain disruptions before they happen.
A strategic supply chain management plan reduces the negative effects of disruptions. If you need assistance with bookkeeping, we at Robookkeeper can provide you with affordable outsourced accounting services.