Having a supply chain is one of the most important ways that companies can help customers. It can be used to help keep the company competitive in the market, and to keep costs down. However, there are a few issues that companies should be aware of when it comes to the supply chain.
Diversification
Developing a diverse supply chain can be a great way to diversify your business. This strategy can be used to offset risk, boost profits, and make your business more flexible.
One of the first steps in diversifying your supply chain is to identify which products and services your current and future suppliers are offering. This can be a time-consuming task.
Another option is to diversify the production regions of your company. This can help you maintain a minimal production volume during times of peak demand.
Diversifying your supply chain can also lead to lower shipping costs. Using less crowded trade lanes can save you money.
Supply chain diversification can improve your overall operations by creating new strategic partnerships, creating new processes, and making you more agile. In the same way that having more than one supplier can drive down raw material costs, having a diverse supply chain can make you more adaptable to the market.
Inclusive procurement
Whether you’re looking to build a more diverse supply chain or to reduce your environmental impact, inclusive procurement is an important business decision. It can help you address the current challenges and scale positive social impact. It also helps to increase your ethical credentials.
Companies that embrace inclusive procurement for their supply chains are able to create new jobs and drive value growth. In fact, research suggests that customers are three times more likely to purchase products from brands that are committed to diversity.
The benefits of an inclusive supplier portfolio include a more diverse base of suppliers, greater innovation, and greater cost efficiency. The organization will also better reflect its customers and community.
In order to make inclusive procurement a reality for your company, it’s important to identify the types of suppliers you want to work with. It’s also important to assess the existing state of your supply chain. If you’re not purchasing from a variety of diverse businesses, you could have an inefficient supply chain, high costs, and an inflexible supplier base.
Circular economy
Compared to the linear system, the circular system aims to maximize the value of resources, minimize waste and recycle materials. It reduces the complexity of products, enables economic closure of loops and maintains the material at the highest quality for as long as possible.
A circular economy (CE) is an innovative approach to product and material design and manufacturing. CE models help build supply chain resilience and incentivize buyers to purchase materials that can be recycled or regenerated.
It also provides an opportunity to innovate and to close the loop for resource efficiency. The circular economy has become an important area of research. However, it requires special attention to develop effective frameworks.
In order to effectively implement a CE strategy, supply chain organizations need to identify the key stakeholders, set objectives, and establish collaborative partnerships. Moreover, they need to define the return on investment from these partnerships. It is also important to set up a common design guidelines to achieve desired circular economy outcomes.
Labor crunch
Whether you are a supplier or a manufacturer, the labor crunch is affecting your supply chain. As you might imagine, the demand for labor is far outpacing the supply. The result is an ongoing shortage, which is intensifying inflation and delays in delivery.
As a result, manufacturers are struggling to find employees who can meet the demands of today’s job market. The US Bureau of Labor Statistics (BLS) reports that there are more open positions than hires. While there are 10.9 million job openings, only 6.7 million people are hired.
Some companies are reporting increases in their overall workforce, but the hiring rate is still lower than before the pandemic. Manufacturing employment has dropped by nearly 400,000 jobs since the recession.
Companies are also struggling to keep current employees. Many are facing “Great Attrition” as workers leave the workforce. This includes both voluntary separations and companies that are forced to lay off workers.
The labor crunch is a complicated issue that will affect global businesses. A recent webinar with Peter Kusnic, research analyst at the Freedonia Group, discussed the causes of labor shortages. The resulting challenges are felt across the entire value chain, and companies will need to look beyond traditional approaches to recruitment.
