It’s essential to build good relationships with multiple suppliers to help reinforce your supply chain and give you more flexibility in terms of pricing and delivery times.
Also consider not only diversification across companies, but also countries; note how Apple have now spread their production between India and China following China’s stricter COVID-19 related policies.
A diverse set of suppliers still has the potential to create a new pain point if they’re all consolidated in one country, should that country decide to close its factories, boarders, or otherwise happens to experience internal disruptions, such as Canada’s 2022 Trucker Protests.
Consider Local Sourcing
The “buy local” consumer mindset has now spilled over into the world of business. Reduce transit risks (container shipping costs roughly quadrupled between 2020-2021!) and language & time difference barriers to streamline your business and reduce response times.
While the low-cost components from far off lands are very alluring, the risks may outweigh rewards; might it not be preferable selling reliably with a lesser – but actualised – profit, as opposed to selling at a larger “on-paper” profit, forever trapped in the realm of theory?
Looking ahead, it appears to be no sure thing that we’re about to revert back to a pre-pandemic world of relative stability in the near future, with foreseeable risks from “The World’s Factory” China with its aging demographic and continued tensions with Taiwan, economists and financial experts predicting an (albeit small) recession in 2023, and the increased occurrence of industrial action strikes relating to the cost-of-living crisis, to name but a few.
Though the world may remain in a continued state of flux, there are strategies we can employ to help minimise the risks from supply chain disruptions, ensuring your product gets to market on time and remains there uninterrupted.