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How to prevent volatile supply chains

AMG Logistics

Each category of risk requires a separate mitigation strategy since supply chains might fail in various ways.

External Shock

Supply chains can fail for a variety of reasons, including shocks and adjustments in supply and demand. One instance of a supply shock would be a supplier that routinely delivered late or not at all. A rapid increase or decrease in demand for the products being offered would be considered a demand shock.

Depending on how rapidly a change might hurt their organization, supply chains that are subject to external shocks either fail to anticipate change or fail to react to it. Better forecasts, which give you more time to prepare, and better reactions, which depend on having a flexible system, may both lessen the impact of such shocks.

Predictive software and simulation models may be used to examine what-if scenarios and prepare for a variety of odd situations that may not be covered by historical data or have already been experienced by your team.

Internal Error

Many systems are unstable because of their inability to adapt because of their inherent complexity. These systems are challenging to comprehend and, as a result, to troubleshoot due to the complexity of their software and physical activities. It also makes them challenging to develop. Another expense of complexity is the specialized knowledge needed to maintain it, which makes businesses reliant on a small number of people or suppliers.

A gap in visibility

Lack of chain-wide visibility is another major problem in supply chains. In other words, neither retailers nor distribution centers are enough aware of the inventory held there nor are they sufficiently aware of the patterns of customer demand at the store. The same lack of visibility affects distribution centers as it does upstream supply chain nodes like ports and factories. Better capacity and production planning may result from more openness throughout the supply chain.

That fundamentally has to do with data. To guarantee that operators and analysts can satisfy customer requests while minimizing inventory costs, the appropriate data must be collected, stored, and made available to them.

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AMG Logistics is a Lagos-based TRACE certified logistics company. Our services include Freight Forwarding, Customs Clearance, Trucking, Distribution, and Warehousing within Nigeria.

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