Preparing for the Next Big Disruption
Supply chains are rarely at the forefront of everyday discourse—until a problem arises. Empty shelves that normally hold ample supplies of toilet paper, cleaning products, or even meat and poultry, provide just a glimpse of the massive impact the pandemic had on international supply chains.
COVID-19 exposed inefficiencies and points of failure in all aspects of our supply chains—from processes to people and technology. Now is the time to address these challenges to help limit the impact of inevitable future disruptions. Here's how.
1. Take time to evaluate your processes. The pandemic caused most companies to take a step back and reassess their operations. When it comes to your supply chain, start by focusing on the current state of your main daily, monthly, and quarterly activities.
Ask if these tasks are documented (for reasons mentioned below) and, if so, is your organization following the set protocols? This exercise should help you identify areas that are not as efficient and begin to consider possible solutions that save time and money. Additionally, ask:
- Can you identify different trade lanes to utilize free trade agreements to improve cost efficiency?
- Can you take advantage of duty drawback or implement the first sale rule to reduce your duty liability?
- Do you manufacture a product that has a lower duty rate than its components and could you take advantage of a free or foreign trade zone?
- Can you move production to somewhere closer/cheaper/easier?
2. Build-in redundancies for your people. We often think of redundancies in terms of equipment and suppliers, but the pandemic taught us that it is critical to have backups in place for your people as well. People may change jobs, retire, have a baby, or take ill during a pandemic; you need to have backup support at the ready to replace their daily roles and responsibilities.
We most often see this problem in organizations that are siloed. Because people are focused on specific responsibilities and tasks, institutional knowledge remains in the hands of a small few. When a key employee is taken out of that system, the scramble to fill the void can create significant disruptions that impact every link in the supply chain.
3. Let technology handle mundane and transactional issues. Cloud-based technology is fast, accurate, and repeats countless mundane tasks for hours without needing a lunch break.
You can implement existing technology to ensure you properly utilize a free trade agreement. There are also solutions to help improve consistency and save time by automating classification work. Save your people power for value-added activities that require creativity and flexible thinking, and lean on technology to handle the transactional activities.
4. Improve compliance. Staying on top of your processes, people, and technology provides another extremely important benefit—-compliance.
When you utilize readily available technology to take over tasks you currently do manually, you reduce or eliminate human error and receive automatic updates on constantly changing rules and regulations that can be costly if you manually miss them.
When processes and tasks require a human touch, well-trained people with competent backups are much less likely to run afoul of compliance.
Finally, if compliance issues arise, you will be happy to have a streamlined and well-documented set of processes covering every step of your supply chain, making due diligence faster and easier.