The outlook for the economy looks rosy, fueled by increasing vaccine rollouts and the reopening of communities and businesses. Even the much publicized labor shortage may be a sign of recovery from the pandemic, as many workers leave jobs to find better opportunities elsewhere. Profits for companies are expected to grow by an average of 4% in the next 12 months, while revenues are expected to climb by 5%. Both projections are at their highest level since 2018.
However, supply chain companies still face many challenges. The pandemic rages on in many developing nations, and a worldwide resurgence could disrupt the global economy again. There are financial difficulties associated with labor shortages, as well as the risks posed by inflation, price fluctuations, the beginning of hurricane season, and even cyber criminals. Fortunately, companies can implement a number of key strategies to minimize supply chain risks.
Protect your Supply Chain from Cyber Attack
Cyber attacks have emerged as one of gravest supply chain risks. The April cyber breaches of Colonial Pipeline, the largest fuel pipeline in the United States, led to fuel shortages across the East Coast and compromised updates to 18,000 users of its network management software, including several U.S. government agencies. That hack was made possible due to a single compromised password. Almost any entity with the right amount of expertise and malicious intent can disrupt an entire supply chain through a cyber attack.
To minimize these risks, supply chain companies can limit personnel access to their network management systems only to employees who are absolutely necessary . Internal IT teams should engage in regular system penetration testing to ensure cybersecurity measures are effective and up to date. Companies can also choose to contract with vendors with proven cybersecurity protocols, such as the use of the Advanced Encryption Standard (AES). AES is the first and only publicly accessible cipher approved by the US National Security Agency for protecting top secret information through encryption, and could be a key factor in foiling a cyber attack.
Prepare Emergency Plans for Supply Chain Disruptions
As noted earlier, the COVID pandemic remains a risk, and a sudden resurgence could force economies to close again and disrupt global supply chains. Natural disasters such as wildfires and superstorms have been increasing in frequency due to climate change, and also pose significant supply chain risks. Only 45 percent of suppliers would be able to continue operating following a natural disaster, according to one survey of hundreds of logistics executives. To stay competitive, businesses should prepare emergency plans to address sudden and potentially massive disruptions to global supply chains.
Conducting a supply chain audit to identify vulnerabilities would be the first step. Companies can then develop a plan that deals proactively with those vulnerabilities. The plan can include stockpiling essential supplies and materials and identifying alternative shipping routes, suppliers, and partners. It may also require an emergency budget, as disruptions to global supply chains could last months.
Choose the Right Supply Chain Partners
As noted above, choosing the right supply chain partners can help enhance a company’s cybersecurity and help prepare for sudden supply chain disruptions. Supply chain partners can also help manage the financial risks posed by price fluctuations, inflation, and labor shortages.
A good logistics company, for example, should be able to find its partners the most cost-effective carriers and help negotiate the complex world of shipping fees and surcharges, minimizing supply chain expenses.
Shipping companies can also partner with a plastic pallet pooling company to lower operational and management costs. Purchasing and managing an internal pool of pallets can drive up supply chain expenses, and divert attention from a company’s core business. A good pallet pooling vendor will ensure their clients have a ready supply of pallets, reducing waste and a company’s Total Cost of Business (TCOB).
Businesses contracting with pallet pooling companies may also find it more cost effective and safer to automate the warehouses they operate. Automation reduces the person-to- person contact associated with COVID, and if properly implemented can reduce supply chain expenses in the long term. iGPS plastic pallets are ideally suited to automation because they don’t have the size variations of wood pallets that can cause machinery to miscalculate and damage products or platforms. They also incorporate smart features like standardized identifying numbers that make them readable by all types of automated systems.
Supply chain companies continue to face considerable challenges even as economic forecasts grow more optimistic. To stay competitive in a post-pandemic economy, companies should implement key strategies to minimize supply chain risks.
Companies can minimize supply chain risks by using iGPS pooled plastic pallets for all their shipping needs. Our pallets are ideal for all types of warehouse automation and help reduce your Total Cost of Business. For more information, contact us at 1-866-557-0047, email a specialist at [email protected], or visit our contact page.