Supply chains have had a rough few years. You might be hoping for an easier outlook in 2023, but economic uncertainty and staffing shortages could put a wrench in things.
Despite these challenges, you can establish a thriving supply chain this year. The key is to be intentional and proactive about your supply chain decisions.
Prepare Now for Economic Uncertainty
Recession is an idea that’s weighing heavily on everyone’s mind. Whether or not a recession officially arrives, there’s no question that the idea already has people feeling uncertain about the future. Start shoring up your supply chain now so that you’ll be ready when the time comes.
Look for Cost Savings
When the economy takes a downturn, profit margins get squeezed and every penny counts. The more money you can save on shipping, the better.
There’s no need to wait until times are tight to start looking for cost savings. If you begin now, you’ll be one step ahead of the game when your competitors start scrambling to make a change.
To find savings, you’ll want to work with an experienced global transportation post audit services provider. A professional team will pore over your transportation activity to identify and recoup overpayments and overbillings.
Stay in Communication
When things get tight, companies often have to make tough decisions about where to save money. That might mean that your customers will cancel orders, leaving you stuck with a warehouse full of goods you can’t move. Or, it might mean that your carrier will eliminate one of your key routes.
Don’t just wait and see what happens to you. Rather, invest time now in building strong relationships with your customers, your suppliers and your carriers.
When push comes to shove, they may be more likely to reduce business with faceless entities and leave contracts with you intact. While not a foolproof solution, building relationships is an easy way to bolster your chances of maintaining a strong supply chain throughout 2023.
Be Responsive and Quick
Economic analysts are useful, but they’re looking at the big picture. Your own employees have boots on the ground among your customers and in your industry. To build a thriving supply chain, you need to pay attention to what your people have to say.
When your team notices signs of a looming issue, be proactive by addressing the problem quickly. For instance, offer a sale on products early on; if you wait until your competitors are offering similar markdowns, you may have to offer steeper discounts than you would have a few months earlier.
Or, if there are signs that a primary carrier is starting to falter, start putting more of the load on your backup carrier. Don’t wait for the problem to fully unfold before you make the switch.
Keep Your Parts Needs Flexible
During an economic downturn, sourcing specialty parts could get tricky. Plan now by moving to standard parts as much as possible. There are likely more sources to pick from. If one company can no longer fulfill your orders, another can take its place.
Then, if your supply needs change, see if you can identify another company that would benefit from the industry-standard parts you used to order. By pointing that company toward your supplier, you can lessen the blow to the supplier’s bottom line. Helping to keep a parts supplier afloat isn’t beneficial just for that company but for the economy as a whole.
Expect Continued Staffing Shortages
Since 2020, labor shortages have played a significant role in supply chain disruptions. That trend may well continue in 2023, so you’ll need to keep it in mind as you make plans for a thriving supply chain.
Attract and Retain Supply Chain Talent
You can’t control the labor practices of every company involved in your supply chain, but you do have influence over what goes on in your own company. To keep your supply chain as healthy as possible, do what it takes to get skilled supply chain and logistics professionals on your side. That might include managers, drivers, warehouse staff and others involved in your shipping and receiving processes.
Offer wages and benefits — preferably more attractive than the competition’s compensation packages — so that people want to work for you. Then, keep them engaged with your organization by fostering a positive culture where employees feel heard and valued.
Rely on Automation
Automated systems allow fewer employees to accomplish more work. Shore up your company’s automation so that you won’t need as many workers in your logistics department.
As you search for new vendors or shippers, ask how they rely on automation in their practices. If you choose to work with companies that have integrated a good deal of automation, your supply chain may be less affected by shifts in the labor market.
Consider Area Demographics
People usually work near the area where they live, so companies in declining communities may have a harder time finding workers. If the population in your area is decreasing, it may be time to build a new facility in a growing community. Before opening a new distribution center, for example, pay attention to the demographic trends in the region.
Do the same before starting a contract with a new supplier. It’s best to do business with companies that will have a strong enough workforce to meet your demands.
Your 2023 Supply Chain
For the best chances of a thriving supply chain in 2023, don’t try to go it alone. Maintain open lines of communication, search for the best team members and rely on the support of a transportation post audit provider.Contact Trans Audit today to learn more about how we can help your business thrive this year.