The continuity of the supply chain is crucial for any type of production, especially for industrial production. Flexibility is equally important: it allows you to respond to market needs, introduce short production runs of goods, and create innovative products. In order to maintain the flexibility of supply chains, respond quickly to market needs and take effective action in crisis situations, it is necessary to automate and optimize the packing planning process.
Main causes of supply chain disruptions
Common causes threatening the continuity of supply chains are well known. They can be divided into four main groups:
- epidemics and pandemics – the basic form of preventing the spread of infectious diseases are lockdowns, i.e. closing down various spheres of social and economic life and imposing restrictions on mobility,
- natural disasters – floods, earthquakes and hurricanes may lead to the suspension of production and transport in a specific area – the greater the impact of the disaster, the longer the paralysis and break in supply chain may last,
- risks associated with advanced technologies – errors in the functioning of information systems, breakdowns and hacker attacks or unlawful use of IT (e.g. to influence customer behaviour) may lead to serious disruptions in supply chains,
- crises and political decisions – government failures, new regulations or the conclusion of international trade agreements can disrupt supply chains.
Although, usually most of the above-mentioned factors are outside a company’s control, they may, however, be anticipated and addressed quickly.
3 steps to mitigate the risk of disruptions in your supply chain
You should anticipate disruptions in the supply chain. It is better to predict and be prepared for irregularities than to be surprised. Here are three recommended preventative actions:
- identification of weak links – the supply chain is only as strong as its weakest link – the analysis should begin with the identification of the core business processes and factors that have the biggest impact on them. In this way, in a crisis situation you may deal directly with the greatest risk, instead of wasting energy on insignificant matters,
- continuous monitoring of suppliers – monitoring and a dynamic system of supplier evaluation, including their financial situation, development plans or quality of management, may allow you to predict any possible risks of supply chain disruptions,
- continuous monitoring of stock levels – you cannot limit yourself only to checking the quantity of stocks – you have to take care about how they are replenished: the basic recommendation is to diversify supplies, so as to have alternative suppliers.
An obvious measure to take is also maintaining close cooperation and constant exchange of information with contractors, as well as the implementation of mutually approved solutions. One of the main ones should be the automation of the packing planning process.
How does loading optimization software help supply chains to be flexible?
Destruction of a road or railroad, suspension of work in a mine, fire in a component warehouse, airport operation closure due to a pandemic or a strike by port workers – there are many reasons for an immediate supply chain breakdown. As a result, the flow of cargo between contractors and the producer, as well as between the producer and customers, stops. To restore the flow, it is necessary to build from scratch the movement of components and finished products necessary for production, to secure appropriate stock levels and to arrange deliveries to production plants and end customers.
A swift response to a supply chain disruption very often requires large amounts of packing planning. They may be a result of a change in suppliers, a change in the means of transport or a change of warehouse location. The use of loading optimization software allows for the quick planning of any changes both in the number and volume of components. As a result, you may maximise the use of cargo spaces. To achieve this using traditional calculation methods is practically impossible.
To sum up, you can’t control many external factors which may cause disruptions, but you can improve the security and flexibility of your supply chains to reduce the impact of the risk. The key to success is efficient logistics, and loading optimization software are indispensable tools in this process.
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