THIS WEEK’S TOPIC: What lessons can be drawn from the ongoing supply chain problems around the world?
THERE are three main lessons and corresponding solutions that can be drawn from the ongoing supply chain challenges worldwide. Firstly, shifting from a ”just-in-time” strategy to a ”just-in-case” one.
Many enterprises are starting to embrace the wisdom of planning ahead so that delays like these can be averted.
Secondly, alternatives like air freight should be considered.
Admittedly, air freight might not be as cheap as sea freight but suggestions include shifting only urgent inventory to air freight, cutting costs from other operational areas in the business, and possibly raise prices slightly to balance out the financial equation.
Finally, the importance of having backups. Businesses have to start expanding their base of suppliers and pivot towards those that are geographically nearer. This way, much of the risks will be mitigated. Many of these changes are uncomfortable and costly, but businesses have to also consider that failure to implement some of these measures could end up being more costly in the end.
Mario Singh
Chief Executive Officer
Fullerton Markets
