The Covid-19 pandemic was a global crisis that disrupted supply chains across the globe. If you’re a retailer, there’s little chance that you escaped unscathed. However, it doesn’t take a worldwide issue to create hurdles in your supply chain. Things like natural disasters, material shortages, or worker strikes can – and do – cause supply chain challenges.
For this reason, it’s essential to have a strategy for overcoming shipping challenges. Building supply chain resilience takes some investment, but you’ll find it’s worth it. While your competitors struggle to get products to customers, you’ll be able to offer them what they need. While you continue to meet demand, you’re sure to build up customer loyalty. Unfortunately, we can’t answer the common question of “When will shipping prices go down?” We can help you to implement tactics that will support you in overcoming current and future shipping challenges.
Here’s how to address the shipping challenges you’ll face in 2023.
- Hold inventory in multiple locations. If you depend on a single warehouse, you are going to be vulnerable. If that building has to shut down for any reason, you’re likely to have fulfillment challenges and be left scrambling. Splitting inventory across multiple locations will strengthen your resilience. Initially, you can expand customer reach while reducing shipping costs and taking advantage of faster shipping times. Additionally, if a location gets shut down, you can rely on another distribution center. Even if it’s further from your customer and takes some extra time, it’s better than them not getting their product..
- Use the value in your data. Having real-time supply chain visibility will create resilience in a couple ways. Using data from across your logistics platforms will help you to track and leverage inventory, supply chain performance, and historical performance. Using such data can help you to automate your processes and optimize inventory levels. Your team will have a better idea of how much buffer stock you can keep on hand before dipping into profit margins. The right data can also help you to measure each stage of logistics, from manufacturing to delivery. To have access to this information, you need to have a warehouse management system implemented and linked to your inventory management software (or work with a 3PL who does).
- Build more supplier relationships. Having more than one supplier makes you a lot less vulnerable. If you have a single supplier and they have to shut down for some reason, where does that leave you? It’s important to have a contingency plan that includes multi-sourcing partners. Having additional suppliers to reach out to if your primary one is disrupted will reduce the risk of shipping problems and inventory shortages. Not only that, having more suppliers will strengthen your overall network, which is always a good thing.
- Use a variety of carriers. Just like leveraging different suppliers, using different carriers will provide a barrier against shipping hurdles. The expansion of ecommerce shopping along with our current supply chain issues means carriers are facing record levels of demand. By working with separate carriers, you’ll have more shipping flexibility and be able to be more agile and responsive. In truth, it does take a bit of extra work to manage these relationships, and you’ll have to be cautious that you don’t dip below the minimum order that provides discounted rates.
- Manage customer expectations with clear delivery timelines. Customers expect real-time insights into their product delivery from the time they place an order. In fact, shoppers may even abandon a purchase altogether if they see the estimated shipping time is too long. Don’t simply communicate during the shipping process – over-communicate. Keep customer service at the core of any shipping processes you develop. If you aren’t able to offer the fastest possible shipping times, be honest. Display realistic estimates for when they are likely to receive goods and customers will appreciate the transparency.
- Make sure fulfillment options align with your audience’s expectations. It’s not always possible to do so, but you should try as much as possible to offer fulfillment options that are in line with customer wants. If next day shipping is common in your space, then it’s not going to go very well for your business to work with a budget carrier who takes a few days longer. Keep in mind what your customers expect when you choose carriers – and then choose a couple of them in separate areas based on customer demographics.
- Rely on logistics experts when needed. Sometimes business leaders are too immersed in their issues to find real resolutions. In these cases, getting some outside support from industry experts will be a game-changer. Just as important, a reputable 3PL has robust infrastructure and best-in-class technology which can help you optimize your shipping processes. Talk to a well-regarded logistics company and see if there are areas where they can add value for your organization. Many offer a variety of solutions that can be customized for your particular needs.
A resilient supply chain is one of the most crucial components of doing business in this new landscape. Without building out contingency plans for getting products in the hands of customers, you’re likely to disappoint them when shipping challenges occur – and that will ultimately hurt your bottom line. It’s worth your time to talk to a high-quality logistics partner like Taylored Services. We will help you to discover new ways to insulate your company from upcoming supply chain challenges.