3 supply chain lessons learned in uncertain times

Strategic advice

3 supply chain lessons learned in uncertain times.

Armed with the right strategies, business owners can take steps to help their supply chains endure in any economic environment.

If your business has ever experienced a disruption to its supply chain, it may be tempting to put that challenging period in the rearview mirror. But that experience may offer some important lessons that can help you secure your business’s supply chain moving forward.

97% of U.S. businesses had or expected to have their supply chains disrupted as a result of COVID-19.Disclosure 1

Whether you’ve experienced supply chain challenges during the pandemic or from some other event like a natural disaster, or are just thinking about future challenges, there are some important lessons you can take from the crisis to make your supply chain nimbler for the future.

Tip 1

Anticipate future challenges you may have and reach out to your primary suppliers to understand their order availability, delivery times, and reliability. Engage secondary suppliers if primary suppliers won't be able to fill your orders quickly enough during uncertain times. Consider how delays may have affected your business during a disruption, and use that as an indicator of what to expect in future unexpected circumstances. Last, be transparent with your customers about any shipping or delivery delays that might occur now.

Contact your suppliersDisclosure 2

As your supply chain grows more complex, unexpected events like a natural disaster in your area can have a ripple effect, or a global event can cause severe disruption. It’s important to have a plan in place so that you’re ready to weather these challenges.

  • There were about 4,200 supply chain disruptions in the first nine months of 2020, up from roughly 3,700 in 2019.

Tip 2

Evaluate demand for your companies' products during turbulent times and scale the supply accordingly. Also, prioritize orders of higher-demand products to save money on excess inventory of less-popular items.

Evaluate your inventory

Supply chain disruptions demonstrate how demand for goods and services fluctuate in times of uncertainty. To mitigate as much ambiguity as you can, you should consider implementing or improving your demand forecasting model to better predict when demand for your products and services may increase or decrease.

Factors to consider in a demand forecast include:Disclosure 3

  • Historical demand — Consider whether demand for your products or services rise and fall seasonally, or identify other trends you’ve seen with your inventory over time.
  • Market trends — Evaluate whether external factors like industry trends, consumer attitudes, or economic conditions could affect demand for your business
  • Key indicators — Staying on top of trends related to your business’s target market can help you predict whether demand for your products will increase or decrease in the short and long term.
  • Risk factors — Identify any industry-specific challenges, as well as any other hurdles you may face in order to maintain the right amount of inventory year-round.

Stabilize your operations for the long termDisclosure 4

1 in 4 business leaders said improving supply chain strategies would be the most important factor in helping rebuild their revenue streams.

  • 53% of business leaders say adapting to new ways of serving customers will improve their businesses.
  • 72% of business leaders say the resilience and agility they’ve learned from the pandemic will help strengthen their businesses.

Tip 3

Consider completing a risk assessment to identify your supply chain's weak points. In addition, digitalizing your supply chains may make your business more agile, helping reduce the effects of any widespread disruptions in the future.

It’s natural to feel unsure in a challenging business environment—and some things will always be out of your control. Still, you can act decisively to strengthen your business’s supply chain now to ensure you’ll be ready for the next challenge, whatever it may be.

Make your business more resilient

Contact your Truist relationship manager to discuss more ways to protect your business.