Covid-19 started 2 years ago, with the pandemic changing daily life. Now many countries are on the road to recovery, global supply chains are still severely disrupted. This is part to do with the pandemic and the tension in the trade. With material prices rising as well as transportation costs it is becoming difficult for supply chain companies to excel while meeting demands for consumers and be profitable.
Due to the backlogs from the pandemic, supply chains have become less reliable. Companies are trying to get the balance of matching supply and demand, which is becoming a problem.
Something which we know will be certain is that supply chains will face disruptions for 2022. Below we have listed ways in which platforms are helping organisations to balance their costs as well as meeting their consumer demands.
Supply diversification
The lack of diversification has caused supply chains to become less resilient to delays and costs increases. The rise in shipping costs has gone up by around 600%. Many of the supply chains main source of supply is from China. There is no alternative to this so the supply chain is faced with a costly disruption which can be long-lasting.
If a business has chosen to use one source and a problem occurs, then this is going to affect their revenue due to failure. By diversifying the availability of suppliers in different regions means the production and sourcing costs improve. This cannot happen overnight and may be a challenge for some organisations which are dependent of certain regions.
Inventory optimisation
Even though there is a supply chain disruption, many businesses rely on the just-in-time model. This minimises delays and costs by having the material moved just before it is required by the consumer. Companies have been able to decrease costs by doing this both on storage and the transportation.
Lower logistic costs
The costs of shipping and logistics are going to rise throughout 2022. Sharp rises have happened in contract rates due to, pandemic recovery, other global events and shipping demands. It has been reported that parcel delivery service rates are at the highest they have been in a while and will continue to rise as the year goes on. Companies are aiming to manage their costs by tightening daily operations.
Supply Chain Sustainability
Many organisations believe that the ESG programme (Environment, Social and Governance) could improve the companies finances. Supply chains are still trying to balance costs and services instead of being consolidated on daily operation levels.
Sustainable practices can allow smart business rules to optimise the time window for carriers and replacement flow management. With proactive approaches being taken supply chain platforms and organisations are able to prepare to withstand continued distributions.
Contact us:
If you’re interested in finding out more about Cold Chain distribution or need more information on how Cold Chain packing & Logistics can help your business grow more, contact us at coldchainpacking.com today!
If you like this article, feel free to share it on your social media sites.