Supply Chain Disruptions and How Startups Can Manage Them

Supply Chain Disruptions and How Startups Can Manage Them

Supply chain disruptions are the bane of every entrepreneur. It will not matter how good your product is if you cannot produce it or cannot send it to your customers. Unfortunately, there is no true way to defend against or prevent disruption. All you can do is prepare your startup properly and minimize any harm such disruptions could cause. Here are 5 ways to do that:

1.    Transport Problems

Transportation issues are the most common supply chain problems you are likely to face as an entrepreneur. Shipping delays can happen for whatever reason, from new laws to global pandemics. Delayed shipments can cause negative consumer experiences, and could even ruin your products if they are time-sensitive or fragile.

There is little you can do about a transportation issue that has already occurred, but there is much you can do to prevent that same problem from happening again. Take a look at the details of the delay and see what you can adjust. Was the issue caused by the delivery service? Find a different one. Were other transportation options operating consistently despite the same problem? Consider hiring them instead.

2.    Changes in Technology and Methodology

New technology generally improves the risks of encountering supply chain disruptions. However, the timeframe in which new methods and technologies are applied can vary from company to company. That variance can quickly snowball into numerous delays, especially if you are the one behind on the times.

The best way to manage that issue is to stay on top of developing supply chain technologies, while simultaneously pushing your partners to act similarly. Any sort of technological update, no matter how beneficial, will take time to apply as well as require some restructuring. The more on-point you and your partners are, the faster you can get back to being productive.

3.    Price Changes

Pricing fluctuations are the butterfly effect of supply chain disruptions. One simple increase can cause a chain reaction of issues that can impact your services. The simplest example is how crude oil prices impact shipping costs. Should shipping costs get higher, you may have trouble getting your raw materials and fail to create your product. Alternatively, those increased shipping costs could push away your customers, reducing revenue.

What you do to manage those changes will depend entirely on the context. Some price fluctuations are temporary, while others are permanent. Use that information to decide on how to react, whether it is to increase prices or change shipping providers.

4.    Hackers and Cyberattacks

Cyberattacks have become increasingly common as time passes. The issue you face as a startup is you are not alone. Even if you are too small a target or are well-protected, your partners may not be. Not only could their services be disrupted, but they could also gain access to your information through that breach.

Managing cyberattacks is a matter of ensuring everyone is on the same page. Before signing up with a manufacturer or any partner involved in your supply chain, talk to them about their security. If they are not up-to-date, do not choose them. If you are already partnered with someone, help them stay up-to-date. Your supply chain’s Internet security is only as strong as the weakest link.

5.    Acts of God and Natural Disasters

No one can blame your company if a storm or flood disrupts your supply chain. You can protect your startup’s resources as much as you want, but there is little you can do against an infrastructure-destroying earthquake. All you can really do is minimize disruption. Fortunately, there is much you can do to achieve that.

Diversifying manufacturers and providers is the best way to keep natural disasters from ruining your small business, but you need to do it right. You need to make sure your different partners are in different geographical locations. That way, a single event won’t shut down all your options.

One of the most important lessons you must learn as an entrepreneur is to know what you can impact. You cannot prevent most supply chain disruptions from occurring, but you can make sure they impact your company as little as possible. Focus on that, and you will be more emotionally and intellectually ready to handle those issues.