As a business leader, you have a certain degree of control over internal factors at your company that might cause disruptions in your supply chain. When external factors are at play that affect entire industries and each link in the supply chain, the best thing you can do is manage the resulting uncertainty.
In addition to other factors, J.P. Morgan cites the ongoing Russia-Ukraine conflict as a source of international supply chain disruptions in 2022. By understanding the far-reaching effects that supply chain disruptions can have on your business, you can make decisions that can keep your company operational and successful during times of uncertainty.
How supply chain disruptions affect businesses
Supply chain disruptions make it difficult for your business to secure materials or goods necessary for your operations, therefore affecting your ability to meet customer demand. A shortage of products might also necessitate reducing staff in your warehouses or factories as well as raising prices to meet financial goals. These actions, while necessary, can harm the way employees and consumers view your company.
How to mitigate the effects of supply chain disruptions
Good decision-making is the key to navigating any crisis. To this end, it is important to centralize your information, prioritize transparency in your management style and collaborate with your supply chain partners to arrive at the best decisions. It is also good practice to diversify your relationships with suppliers and manufacturers so that business can go on even when one entity shuts down.
Uncertainty during a supply chain disruption is often the result of a lack of preparation. While it is nearly impossible to emerge from a global supply crisis unscathed, your business can still function if you prepare accordingly and react in a timely manner.