Basic actors in the Supply Chain
Generally, in every supply chain there are 3 basic actors: providers, manufacturers/producers and distributors. How does this supply chain work in the event of sudden changes and abrupt increases or decreases in the goods demand? How is my influence/control on it?
Many things have been said regarding risk management in supply chains, for example in the case of Brexit, a challenge that seemed easy to address at first as we had enough time to make a planification. However, time is a luxury that does not allow us to foresee the significant changes we are experiencing nowadays.
How to face present and future challenges in the supply chain
Once we have clearly identified the 3 basic actors of the supply chain, we must proceed to show the way to face the present and future challenges of the supply chain in the agricultural sector. For that, we should imagine the following situation.
The challenge consists of minimizing the impact of the little availability of products, the effective management in an extremely changing moment of orders and with significant changes in distribution. For that, think about the following:
- Communication: Communicating with your supply chain, as obvious as it may sound, is the most important thing that you could do. You need to have a clear vision of what is happening in your SC (Supply Chain): which products you can buy, when they will arrive, etc. Doing that right will allow you to fulfill your orders. In those cases, communicate with the decision-makers so that messages can be accurate and make sure that they are correctly linked in succession.
- Be flexible: explore new channels and try to reduce the common stress that your SC usually has in an exceptional situation.
Explore all the options: think about how your client receives its order. Not only yours, but the ones of your competitor. Maybe they are using alternative means of transport instead of the traditional ones.
3. Protect your key products: it is time to limit your purchases. Center all the efforts in maintaining the common production lines and those you know better. Manage your orders in detail: “micromanage” your demands, prioritizing a balanced distribution among all your clients. It is not time to lose any, but to show them your support and supply in any way.
4. Be practical: avoid sales foresight to mark the course. Monitor the available resources. Make an intervention when necessary. Work on standard lines and ignore those with a demand that is not crucial for the company.
5. Product stock: it should be of low risk
Check the special offers, assess their impact and avoid the lack of stock by foreseeing their demand. Reducing them at this moment will release some of the operative capacity of the distribution.
6. Stay connected with your team: it is essential to be organized and that you encourage your team so that they take the opportunities and overcome challenges.
The current situation we are living in is taking the supply chains to the limit. Success will require internal collaboration in your supply chain, your responsiveness, the flexibility you reach with our clients and suppliers and your orders management.
Gerardo Alcalde, professor at the Master in International Agribusiness Management.
