Across industries, supply chain issues have snarled companies’ production processes. According to experts and sources like the US Chamber of Commerce, there have been three main causes: worker shortages, pandemic lockdowns in China, and bottlenecks in US ports and railyards. These three issues have kept goods from getting to their destinations and increased costs across the board, both heavily straining the supply chain.
Identiti’s Senior Supply Chain Manager, Ryan Shaw, states, “Supply chain disruptions have been a global challenge, and our industry is no different.”
So how can companies avoid these disruptions? How can they solve for new, unexpected shortages? Adjust to workforce gaps? Search for new supplies like raw materials or alternate services like distribution? Below are several strategies that Identiti has deployed over the last year to mitigate the impact shortages have had on our business and clients’ needs.
Leverage Existing Relationships
One thing remains consistent among the seemingly constant uncertainty and disruption since 2020; no matter what side of the commerce transaction you fall on, we are all facing similar business turbulence. This mentality makes relationships—with both clients and suppliers—the most valuable resource for any business. Everyone is dealing with shortages and now is the time to lean on the value found in those relationships.
“Identiti has leveraged relationships with both existing distribution channels,” Ryan says, ”as well as new distribution channels developed through key industry part manufacturers.”
Use your existing network to forge new connections and widen your resource base, giving yourself options. Also, make the effort to build authentic relationships with your clients. A healthy relationship builds confidence. So when problems pop up, clients are more likely to trust you with the solutions you suggest. Like in any relationship, trust and transparency are key.
Keep Communication Channels Healthy
Existing relationships stay strong when everyone is on the same page. This means keeping stakeholders updated and sharing timely news of changes or unexpected developments. Clear communication paves the way for smoother processes, especially when supply stocks are unpredictable.
“The days of stock-by-order have passed us for the foreseeable future,” Ryan says, “so working with our clients and partners to properly plan demand is the critical path to successful projects.”
Be proactive when communicating with suppliers so you know what inventory is available. And be sure to keep suppliers’ stock in mind when planning with your clients. This also means that processes might need to change—and when there’s change, communicate clearly what has changed, why it’s changed, and how it will impact the client.
Since the onset of the supply-chain disruptions, Identiti has made more frequent contact part of its SOPs with suppliers. This way our teams and clients know what’s available and can plan in advance for alternatives, if needed.
Reappraise Raw Material Cash Flow Budgets
Overnight, the price of aluminum can seemingly double. Or steel can quadruple. That might seem like an exaggeration, but across industries, our teams have found that the cost and availability of materials has been incredibly unstable. That said, how does this instability trickle down to budgets? Is it better to pass along the price increases to clients? Or is it wiser to retain trust by being mindful that drastic price changes can shake clients’ confidence?
This unpredictability is sending shudders through the foundations of carefully planned finances. Inflation affects budgets everywhere. Companies are now re-evaluating cash flow and finding that they’re forced to make tough choices. Raise prices or cut overhead? Pay higher costs or scrounge for new alternatives that may be less expensive though unproven?
The old plans may no longer work in this new environment, and it is important to forecast for fluctuations in both cost and supply—while still retaining the stability that instills trust in clients.
Finally, Use All of the Above Strategies and Plan Ahead
The bottom line here is to plan ahead and stay agile. Flexible thinking and quick decision-making are key. Some tactics to test might include:
- Lengthen timelines
- Adjust lead times
- Experiment with pricing
- Make upgrades
For example, Identiti has had to readjust our permitting and fabrication timelines so they happen simultaneously on parallel tracks, rather than being on a linear track where one was triggered by the other.
“Identiti has been able to leverage our upgraded technology systems alongside client communications to properly forecast our demand three times further ahead than prior years,” Ryan says.
These adjustments have helped Identiti maintain customer satisfaction and foster our existing relationships.
Most experts agree that the disruptions to the supply chain are not soon resolving. “These challenges have forced us to strengthen our planning, communication, supplier relationships, and raw material cash flow budgets,” says Ryan.
And because these supply chain issues are far from over, its best to ensure that your processes tackle those core issues.