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Thursday, November 25, 2021

5 Ways To Reduce Inventory Shortages During The Supply Chain Crisis

The global supply chain will never be the same again thanks to COVID-19. Problems started appearing in 2020 as consumers started buying more goods online. By 2021, the problem has gotten even worse, and experts say there’s no end in sight for the current supply chain crisis. Shipping containers are in high demand as products sit in ports for weeks, if not months, before they reach their destination. 

According to the Institute of Supply Management (ISM), the lead time for production materials raised from 85 days in the month of May to 88 days in the month of June, which is the highest recorded figure since ISM began gathering data in 1987. Meanwhile, lead time for maintenance, repair, and operating supplies increased from 42 to 45 days. Electronics manufacturers and automakers are facing even worse delays, with one respondent saying lead times for electronic components went from 16 weeks to more than 52 weeks.

If your company is struggling to keep stock on the shelf as products slowly move their way through the supply chain, you’re not alone. These tips will help you reduce shortages until lead times improve.

Keep Inventory Visible

You should know exactly how many items you have on hand at any given time. Increase visibility in the workplace to keep these items in view so your team can quickly double-check the numbers in the system. Store goods and raw materials in industrial wire baskets to keep them insight. Get rid of empty storage containers and other obstacles that can obstruct your view. 

Products and materials can easily go missing from time to time, giving you an inaccurate count. Others may get damaged over time, especially if they aren’t being utilized right away. Conduct regular walkthroughs and correct any problems as they occur. 

Supply Chain
Source: Pressmaster/Shutterstock.com

Set Safety Thresholds

Avoid having zero stock on the shelf by setting clear safety thresholds in your inventory management system. You will receive a notification if your stock runs below a certain point, giving you a chance to correct the issue before it gets any worse. Research possible supply chain issues and reach out to your suppliers to find out what’s causing the issue. 

If you go below the threshold, update your lead times accordingly to keep your customers’ expectations in check. You may have to raise prices or increase delivery estimates based on how long it takes to receive more supplies. 

Schedule Production

Consider scheduling production times based on available inventory. You can schedule downtime or move unused stock offsite if you are having trouble getting supplies. If you don’t have everything you need to manufacture your goods, there’s no point in keeping your facility running. Track stock levels based on the parts required for certain goods so you don’t accept orders or start making goods you can’t deliver. 

Coordinate with your employees to improve efficiency so you don’t waste their time. Schedule work days and shifts around delivery times and stock levels to avoid interrupting the manufacturing process.  You can minimize your overhead while you wait for these problems to be resolved. 

Supply Chain
Source: Blue Planet Studio/Shutterstock.com

Decrease Cycle Time

Cycle time is a key component of your overall lead time. The faster you can manufacture your goods, the more accurate your numbers will be. Your team can quickly put raw materials to work to keep supplies moving through the supply chain. If stock sits on the shelf for too long, it might be counted as inventory even though it has already been earmarked for production. Your customers also won’t have to wait as long to receive their packages. 

Use conveyor belts and sorting racks to decrease cycle time. Keep your products in a pallet container to simplify the packaging process. You can load your goods onto a pallet in just a few minutes or less without using shrink wrap. 

Utilize Data Analytics

Data is your best friend when it comes to managing inventory levels, especially when facing an uncertain climate. Keep track of how long it takes for products to arrive based on current conditions to keep your customers and business partners in the know. Use this data to stay in control of your operations. You can adjust your hours of operation or inventory levels based on current estimates. Collect data from multiple sources for a more accurate understanding of the situation. Stay in touch with logistics teams to find out what’s happening on the ground. 

Manufacturers of all sizes are facing a new reality. Your goods may be in transit for long periods of time as these delays continue. Prepare your inventory for the long journey by choosing reliable storage and shipping containers. Track your inventory and supplies as they move through the supply chain. 

No one is immune to the current supply chain crisis. The more you prepare for these challenges, the better equipped you’ll be to weather the storm. Stay up to date with the latest supply chain forecasting to make the most of an otherwise difficult situation.

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Daniyel Carlson
Daniyel Carlson is a Young Researcher in the field of Data Science & Analytics having research experience of more than 8 years. He has a Masters in Computer Engineering and currently serves as an Editorial Assistant in IGI Global, United States of America. Daniyel also holds honorary positions in the Associate Member of Institute of Research Engineers and Doctors, International Association of Computer Science and Information Technology, International Association of Engineers, Society of Digital Information and Wireless Communications.

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