Supply Chains must come to terms with the fact that “uncertainty is certain” and is here to stay. Just when world logistics was recovering from the havoc of Covid that the Ukraine crisis brought back the jitters. The recent turbulence has pushed critical sectors’ supply chains into troubled waters and exposed the loopholes of highly globalized networks. The world is no longer going to be linear and companies will have to build resilience to future-proof the supply chain.
A McKinsey report revealed strategies deployed by global companies to build resilience and mitigate risks. I too believe that these strategies can work for companies in the Middle East.
Higher inventory levels
The cost of carrying higher inventory may erode the bottom line but not having stock can hurt even harder. More generous stocks and buffer capacity is a simple way to increase resilience, whether that meant overutilizing production facilities or maintaining excess safety stock levels. Supply chain operators can form strategic tie-ups with manufacturers to allow surge capacity for unexpected calamities.
Multi-sourcing of materials
Two heads are better than one is a time-tested maxim and will work equally well during tough times. Having more than one qualified supplier is necessary to overcome the disruption of supplies. Better still if the suppliers are in different zones even if there is a price disparity. Relying on a single supply source is no longer viable in volatile times.
Regionalizing the supply chain
Beyond multisource, companies can reduce total dependence on global markets and turn to regional suppliers to shorten turn-in times for finished products. Local supply chains allow better control over inventory with products moving through shorter distances.
Electric Way is a leading distributor in the region for cables and electrical equipment and supplies. We have weathered the crisis with the effective use of technology innovations and fiscal management. We work with multiple suppliers and carry a large inventory that ensures that our supply chain is always fluid. I am sure that our processes and practices can benefit our customers and suppliers.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.