Supply Chain Crisis: Fear of Exhaustion!
In the world of business, supply chain management plays a crucial role in maintaining the continuity of supply and inventory of goods and services. However, supply chain professionals often face a common fear: the fear of running out (FORO). This fear can stem from various sources, such as quality issues, weather disruptions, natural disasters, global pandemics, or demand changes.
The fear of running out references both the fear of supply disruption and the fear of having to deal with that stressful scenario. This fear can lead to increased stress, anxiety, and absenteeism among personnel, causing tighter management pressure and a focus on risk avoidance that can hinder innovation and adaptation in planning and processes.
To combat this, it is essential to prepare both the supply chain and the employees to address FORO. Developing, mentoring, and supporting the people on the front line is crucial in reducing fear and improving the ability to handle supply shortages. People respond better to people they know and have already met, creating a bond and a level of trust and familiarity. Building a network of senior contacts with all suppliers can provide 24/7 support and create a bond of trust and familiarity.
Supply Chain professionals are tasked with expediting the restoration of supply to minimize the impact of supply shortages. One strategy to achieve this is having a dedicated team of experts for dealing with part shortages. This team can help resolve issues quickly and effectively.
Another strategic measure is the implementation of disaster recovery plans, dual sourcing, alternate supplier pre-selection, outsourcing, strategic inventory stockpiles, lead time reduction, expedited transit routes, executive level relationships with suppliers, digital supply chain connectivity, drop shipping, and disintermediation of the Supply Chain.
It is important to remember that the inability to fulfill customer orders due to supply shortages can result in loss of business, lost revenue, financial losses, legal liability claims, and potential business failure. Therefore, it is essential to prioritize having enough buffers, safety stocks, contingencies, and redundancies to prevent future supply shortfalls.
While the fear of running out can be paralyzing, facing it head-on and dealing with it repetitively can improve stress management skills. Developing relationships with suppliers at all levels can help in resolving supply shortages quickly and effectively.
In conclusion, addressing the fear of running out is not just about improving the supply chain, but also about preparing employees to handle supply shortages. By taking proactive measures and fostering a culture of resilience, businesses can mitigate the impact of supply chain disruptions and ensure continued success.
