3 Keys to Disaster-Proofing Your Supply Chain

Roughly two years removed from a global COVID-19 outbreak, a renewed focus and energy continues to surround potential weak points in company supply chains. Entire industries have been forced to rethink their approach to manufacturing, shipping, warehousing and keeping store shelves stocked in the wake of widespread disruption.

In identifying these weak points, companies are hoping to solve a problem estimated to cost retailers more than $1 trillion (that’s trillion with a T) in lost revenue. Empty store shelves or “stockouts” (out-of-stock items) are the hallmark of a dysfunctional supply chain, negatively impacting customer experience, marketing performance metrics and just about every other aspect of both eCommerce and brick-and-mortar business.

While COVID-level disruptions are admittedly far from the norm, logistics professionals are responsible for safeguarding supply chains against more frequent threats like freezing seasonal temperatures and destructive weather events.

Here are three key ways the logistics landscape is adapting to better fortify supply chains against extreme circumstances.

Key 1: Diversification

Relying too much on any one link in the supply chain creates critical choke points for businesses when unforeseen disruptions strike. True, while consolidating a company’s means of production, shipping and storage may simplify things on paper, the havoc one delay can cause within this particular logistics strategy is vast.

Diversifying your options adds a welcome level of complexity to your supply chain, introducing flexibility and safety in the face of potential disaster. By proactively diversifying your options, you effectively fortify your business operations against influential shifts in international politics, or the next time a container ship blocks $10B in daily goods from moving through the Suez Canal.

Key 2: Visibility

We cover the topic of shipment visibility often around here. Visibility falls under the slightly larger umbrella of clear communication, in the sense that a constant awareness of where your shipments are located (and what state they are in) is a major pillar supporting disaster-proof businesses. Lack of visibility leads to lost or damaged items, late arrivals and ultimately rejected freight – a circumstance that not only wastes money and resources but harms your reputation within your network.

Fortunately, a good TMS can mitigate these issues and identify opportunities to improve efficiency by providing continuous real-time visibility into moving freight. Access to an advanced TMS is crucial to measuring, optimizing and maximizing shipments – another reason we tend to bring it up so much.

Key 3: Predictive Modeling

On the subject of technology-driven efficiency, let’s briefly discuss the delicate science of predictive modeling. Finding a single product’s optimal path from production into the waiting arms of a paying customer is incredibly complex. While not yet perfected, AI systems are beginning to make their presence felt across the logistics landscape with smart forecasting – and the more accurately companies can project demand, the more efficiently they can provide available supply.

While a predictive model may not yet be able to figure out the precise number of units a given brand will need on store shelves by Black Friday, advanced algorithms can form an educated guess based on oceans of historical data and its projected impact on future buying behavior. Though still evolving, AI is already well on its way to revolutionizing how 3PLs attack various logistical challenges.

In this growing age of eCommerce and next-day shipping, each of these keys to supply chain resiliency plays a vital role in both streamlining and strengthening a business.

The ability to withstand global disruptions, quickly scale according to need and proactively address changing consumer behaviors is an invaluable resource. Coincidentally, they are also the hallmarks of a good 3PL partner – learn more directly from the First Call team about how we can help disaster-proof your supply chain.