Blog > How to maintain supply chain resilience while scaling up
The past few years have exposed vulnerabilities in global and domestic supply chains which may only be exacerbated if you’re in the fortunate position of being able to scale up your company’s operations. As scale increases, so does the amount and size of risks and errors that disrupt your operation’s supply chain resilience.
Here we look at some of the supply chain challenges involved in scaling up, and some ways to mitigate them.
Compounding supply chain challenges in scaling up
Now-common supply chain issues include labor shortages, food safety, material and supply shortages, changing safety standards, and shutdowns of partner businesses. Not to mention large-scale equipment shortages, transport and shipping delays, and elevated transport and freight costs. Supply chain backlogs and changing legal requirements mean some companies need to find alternative ingredients and packaging material sources. The more you are producing, the more these issues can be compounded. And in an environment where you will have more working capital tied up the larger you scale.
Consumers increasingly demand full transparency of product sources and provenance, ingredients, production processes and supply chain such as transport. Combined with shifting food safety standards, there’s an increasing need for retailers and suppliers to improve their traceability capabilities. This becomes more complex the greater the number of SKUs you have, because it requires complete supply chain visibility at every point, something that can be difficult to achieve with fragmented supply chains. Whilst spreading the supply chain over multiple suppliers and manufacturers may allow for price or quality advantages, and theoretical spreading of risk to avoid over-reliance on specific channel partners and geographic locations, managing fragmentation as you scale becomes more challenging.
Then there’s the people and technology side of it. Manual processes can cause errors, waste time, and consume resources. As the scale of your business increases, you want to avoid proportional increases in errors. Warehouse mispicks, for example, are expensive to correct, and become increasingly expensive the longer it takes for you to recognize them. Likewise, taking orders from customers can become a source of error as you scale your volume higher – any manual touchpoint in the process is a potential source of human error, which can be costly.
Solutions to ensure supply chain resilience
There are some obvious fixes here. From a ranging standpoint, core SKUs are more reliable than seasonal or rotating ones whilst global supply chains remain uneven.
Another is automation to increase supply chain real-time visibility and traceability from point to point, and to decrease the risk of human errors at each touchpoint. This involves the use of supply chain management software programs such as order management systems (OMS), warehouse management systems (WMS), proof-of-delivery (POD) programs and potentially even direct store delivery (DSD) systems.
These systems will also assist in maximizing staff productivity and improving inventory accuracy, while ensuring compliance with food safety regulations. A robust OMS solution also provides salespeople with better tools to penetrate existing accounts, increase margins and prospect new accounts.
Automation using a series of connected end-to-end software programs also affords centralization and consistency of tools, techniques, and methods. As well as the ability, through notifications and automated alerts, to identify actions required before they impact other links in the supply chain and inventory management to identify potential stock shortages in advance.
While there are numerous practices businesses can implement into their processes to manage supply chain risks when scaling up, their effectiveness will depend on the reliability and scalability of the systems in place. Automated systems decrease vulnerabilities across the supply chain, improving dependability and trust.
To learn how supply chain management systems can directly help your company mitigate risks and improve supply chain performance as you scale, contact an TELUS Consumer Goods Supply Chain expert today to evaluate your unique challenges.
If you’re ready to get started scaling your operation or improve your SCM processes, request a live demo of these supply chain management solutions. Through a live demo you can see how these solutions can reduce risk and waste in your supply chain while increasing margins and improving customer satisfaction.