Unforeseen disruptions in SCM hamper business

Retailers are diverting their attention towards creating efficient supply chains. But there are unforeseen disruptions that are not in their hands. What happens when such a situation arises and how are they to be dealt with? Let's find out

Having the right item in the right quantity at the right time at the right place for the right price is the strategy behind an efficient supply chain for a business.  

SCM in retail
In retail, the success of business is directly interlinked with the efficiency of the supply chain. The supply chain here is a two way flow, one to do with the movement of goods and the other is the flow of information. Even the slightest delay or disruption in any of the flow can have an adverse effect on a retailer’s business. With the technologies and innovations available today, you may be able to tackle the internal problems. But supply chain disruptions can even arise without a warning. These are the unforeseen disruptions like riots, strikes and natural calamities.  

Effect on the business
Disruptions especially when unforeseen can hit a retailer adversely. The immediate effect would be observed in the financial performance of the brand which would mean a dip in sales. This would indirectly mean unhappy customers. Increased manufacturing costs, inventory accumulations and drop in level of customer service are some other effects that come along with such disruptions. Vineet Kanaujia, General Manager – Marketing, Safexpress Private Limited articulates, “If the retailers are unable to receive their goods on time than their entire inventory planning goes haywire. An imbalance between demand and supply could happen. Unanticipated delays of these kinds can increase their costs as well as lead to loss of business in extreme cases.” 

Way out
The most important thing to keep in mind while working on the supply chain efficiencies is to take in to account that unforeseen disruptions will take place and one should not leave the decision making up to the time that the disruption actually takes place. You should have fully integrated business contingency plans and emergency response plans for such situations. The ability to more effectively manage the supply chain by understanding the potential impact of such disruptions can create a strategic advantage in a competitive marketplace. Failing to understand the potential vulnerabilities can compromise the supply chain's ability to handle unexpected and sudden shocks. Partnering with efficient 3PL players who can handle your inventory in the best possible way should be aimed at. Kanaujia says, “As the Supply Chain leaders of the country we have mapped out each and every route that our vehicles traverse on. We have a Plan A, Plan B, Plan C for all our shipment routes, i.e., we have pre-planned alternative routes for all our destinations. In case there is an unforeseen calamity or riot or strike on one route, we immediately move our shipments through the second route. In case the second route also faces some sporadic hurdle, we then use the third route. We have well-trained and qualified drivers managing our GPS-enabled vehicles. This helps us in pre-empting the unforeseen hurdles and we try and overcome them pro-actively, since we are well prepared mentally as well as resource-wise for the same.”  

So the next time to you are in the process of planning your SCM initiatives, make sure you remember to take into account all the possible disruptions and their counter solutions to stay ahead in the retail race.

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