The international supply chain and logistics breakdown has been going on for more than two years. The situation has affected businesses in every sector of the economy at every level, from exploration and production to manufacturing and delivery to end point consumers. Across the board, enterprising owners in smaller firms are doing their best to minimize the adverse consequences of broken global supply chains. How long the effort must persist is anyone's guess. The war in Eastern Europe, an ailing world economy, and various other factors threaten to turn the crisis into a long-term cost of doing business.
Fortunately, manufacturers, transport companies, and many other organizations have access to powerful tools and tactics for minimizing the ravages of short supplies and late deliveries. Light manufacturing entities are discovering the usefulness of local sourcing and multiple other approaches. In the same way, commercial fleets are adapting by using electric vehicles whenever possible. All owners can utilize strategies like advance ordering, using multiple vendors, and offering financial incentives for on-time deliveries. The following points highlight the various ways smaller businesses are dealing with the supply chain problem.
Businesses engaged in light manufacturing have dozens of tactics for assuring a steady stream of supplies. Since supply chains began to falter in the early 2020s, purchasing managers have begun engaging in bulk buying, even when inventory carrying costs cut into profits. In addition to local sourcing, some management and ownership teams have chosen to cut low profit product lines to eliminate the need for international shipments of goods. Local sourcing can be combined with multiple vendors for higher levels of efficiency, as noted below.
For small commercial fleets, particularly those that operate small vans and cars, there are several excellent ways to offset international logistics backups. For one, fleet managers can review comprehensive guides to learn about on-site EV (electric vehicle) chargers. When transport companies rely on renewable and inexpensive electricity to run their everyday businesses, they can break free of their dependence on combustion fuels going forward. But it's imperative for fleet supervisors to understand all the pertinent points about EV charging networks, the price of installing chargers, and how to put them into use. EV cars, small trucks, and vans are on the front line of the supply crisis. Transport firms can achieve savings and meet efficiency goals by becoming energy independent through the installation of on-site EV charging units.
Year Ahead Ordering
Many business professionals are just now discovering the wisdom of what theater enthusiasts have known for decades: buying months or years in advance can be an inexpensive and effective way to beat the system. Indeed, many US-based manufacturing entities are placing orders for raw materials, especially scarce ones, at least a year in advance. If producers are reliable, the long game is one that can make good sense for owners who need their shipments to meet seasonal sales demand.
Money talks, even amid a worldwide logistics snafu. That's why so many companies who are mastering business are willing to pay a reasonable premium for on-time deliveries and full orders. Overseas sellers are often motivated by price to a much greater extent than local vendors are. Large numbers of China-based suppliers are in such an intense state of competition at home that they're willing to cut corners and eliminate red tape to transmit goods to US-based buyers in record time, notwithstanding international shipping impediments. How much should owners pay to get their goods delivered on time? That is a question that should be answered on a case-by-case basis, considering profit margins, inventory levels, and seasonal selling cycles.
Dividing orders up among multiple vendors is a simple but potent way to alleviate the risk of slow deliveries. That's particularly true when businesses buy goods from overseas vendors. As noted above, local sourcing goes a long way toward fighting the international logistics breakdown. But the second part of that effort should involve finding two or more vendors for each category of goods a company regularly purchases. Some owners worry that they must deal with a complex pricing situation when multiple vendors have different pricing and discount structures. That kind of accounting dilemma can be challenging, but the small added effort can pay large dividends in terms of reliable deliveries and avoiding supply shortages.