Businesses across the country have been dealing with major supply chain disruptions through much of the pandemic, and as a result, they are often unable to meet the demands of their customers. Such a serious issue requires thoughtful action to minimize fallout from these supply chain problems. Here are some ways to respond.

1. Use Tools to Boost Efficiency

Supply chain issues highlight a lack of efficiency in getting products into consumers' hands. While they won't solve all of your problems, you can improve efficiency if you use the right tools.

"Using the latest automation tools can help you stay on top of your supply chain and plan efficiently," says Kalin Kassabov at Forbes.1 "Currently, supply chain management (SCM) software is mainly used by larger businesses, which may be dealing with multiple departments, locations and niches. However, smaller businesses can also benefit from SCM, especially when supply chain issues are common. This software helps you track inventory, manage shipping and keep updated on which items are moving the fastest."

There are plenty of software solutions that cater to small businesses. If you aren't using one, it might be time to explore your options.

2. Form Relationships with More Suppliers

If your current suppliers simply aren't meeting your needs, it's time to explore alternatives, even if on a temporary basis. These issues are widespread across industries, so suppliers are already used to striking up new relationships and may be willing to be flexible with contracts and terms if you don't necessarily want to make permanent changes. Look for stable and reliable supply companies that can deliver on what you need. It's also good to look close to home to minimize distance-related delivery and shipping delays.

3. Make Product Changes

There's a chance you sell some products with issues that simply using different suppliers won't solve. In this case, you may need to look at making some changes to your products or find alternative products to sell in their place. If circumstances improve in the future, you can always return to selling your original items. In the meantime, you may be able to make up for at least a portion of earlier lost sales.

4. Add to Inventory When You Can

When supply chain issues are not impacting your inventory, consider stocking higher volumes than you normally would. This won't always be feasible, but when sales are going well and availability isn't limited, you can prepare yourself for future issues by getting ahead on inventory, especially on your best-selling items.

5. Improve Customer Service

Supply chain issues are a headache for any business, but they also lead to inconvenience and disappointment for your customers. The average customer might not understand or care about the behind-the-scenes problems. They just know they aren't getting what they want. That means you need to be on top of your customer service game. Be honest with them about existing and potential issues and assure them you're doing everything you can to meet their needs.

6. Communicate

Communicate with your customers, as well as your staff. Use social media and email lists to inform followers and subscribers about what they can expect, and make sure your team understands the situation so they're able to help solve the problem.

"Update your employees and customers frequently and answer all questions as quickly as possible," says Hello Alice.2 "While no one likes to deliver bad news about backorders or delayed shipping times, it is better to keep your customers updated and informed. Consider adding a banner to your website or updating your order confirmation emails with up-to-date processing and shipping times. Similarly, being clear with your employees about supply chain issues prepares them to act accordingly and even invite problem solving as a team."

We may be dealing with widespread supply chain problems for the foreseeable future. Most economists believe they will continue throughout the first half of 2022 before improving later in the year. The good news is that many consumers are already aware that this is a broad issue, which means they may be more understanding when you can't get them what they want as quickly as they'd like.  With the help of these tips, your company's reputation may not take the hit it would have if such issues took place pre-pandemic.




The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank. Nevada State Bank is a division of Zions Bancorporation, N.A. Member FDIC