The supply chain industry is not unfamiliar with unpredictable market shifts. However, the COVID-19 pandemic took the uncertainty to a whole new level. It shook the global supply chain industry to its core. According to Accenture, this impact was so bad that:
- 94% of Fortune 1000 companies experienced supply chain disruptions from COVID-19.
- 75% of companies have had a negative or strongly negative impact on their businesses.
- 55% of companies planned to or already had to downgrade their growth outlooks.
Supply chain issues can have long-term consequences for many industries, including construction, manufacturing, energy, and other heavy industries. Although many industrial hardware suppliers have resumed operations fully, the shortage of industrial hardware continues to haunt business owners. Worst still, these shortages are likely to last for a while, making it necessary for you to plan your industrial hardware supply for the long term.
Let’s understand how you can prepare for this shortage.
-
Stockpile What You Can Well in Advance
This is probably the best way to deal with the industrial hardware shortage that is likely to happen soon. You can forecast your needs early and buy what you can before it’s too late. Making last-minute purchases during a shortage is not only expensive but also risky. You might end up paying twice as much for the industrial hardware with no guarantee of timely delivery.
The good news is most distributors offer an advance purchase program. You can get the details from your industrial hardware supplier. Moreover, provide your distributor with the forecast as early as possible to avoid delays.
However, there is one downside to this approach. In some cases, your industrial hardware distributor may be able to fulfill only half (50%) of your order immediately. It’s still one of the best ways to prepare for a potential shortage. Just make sure to talk to your supplier before placing your order.
-
Work with Your Industrial Hardware Supplier
In industrial hardware procurement, strategically developed supplier relationships are quite useful. You can source the material on priority if you have a well-established partnership with your industrial hardware distributor. This can be a lifesaver, especially during a shortage.
Talk to your industrial hardware supplier about how you can streamline your supply during a shortage. Maybe you can work out a delivery schedule to keep your inventory up-to-date. Or, you can make a stop-gap arrangement for short-term delivery delays.
More importantly, your supplier can help you find better alternatives. They could help you find the best suitable industrial hardware with better availability depending on the required specifications, performance, and certifications. This will help you avoid costly delays.
-
Understand the Market Trends
Another critical aspect of dealing with industrial hardware shortages is the increased prices. The cost of raw goods, manufacturing, and transportation are likely to hit the sky with supply chains worldwide getting disrupted. A sudden price hike can seriously threaten your daily operations and balloon your budget.
Keeping an eye on the changing market trends is probably the only way to mitigate the increased prices. A detailed market trend analysis can help you if the price of a commodity or industrial hardware is likely to go up. If this is the case, work with your industrial hardware supplier to purchase it before the prices explode.
-
Focus on Better Supply Chain Visibility
It’s quicker to build inventories if you have a 260-degree and 24/7 visibility of your supply chains. Supply chain visibility is having a real-time view of all the operations, ranging from procurement to delivery. This enhanced visibility helps you reduce uncertainty and fluctuation in your industrial hardware supply.
- The first step is to analyze your current supply chain. This will help you spot the bottlenecks and pain points. You can leverage data analytics for a thorough analysis.
- Once you have identified the pain points, you can make the necessary changes based on your priorities.
While doing this, you will also need to improve collaboration with your partners and suppliers. They are at the heart of your supply chain visibility. Make sure to share your data, technology, and best practices to foster mutual growth. This will help everyone overcome the challenges of industrial hardware shortage.
-
Be Prepared for Delays
Despite taking these measures, delays are still likely to happen. The global economy is yet to recover from the aftermath of COVID-19. This will lead to irregular hardware supply, resulting in frequent delays. That’s why you should be honest and direct with your industrial hardware suppliers, business partners, and customers.
One cardinal rule you must follow is not to overpromise and underdeliver. You will need to have a more realistic work schedule. Talk to every stakeholder before you plan your work schedule. Understand the potential delays and budget your industrial hardware supply and expectations accordingly.
In Conclusion
Different industries are facing the industrial hardware shortage in different ways. As a business owner, you will need to start making changes before it’s too late. Think about what you can do to keep your inventory stocked up and your project timeline intact. Hopefully, these five tips will help you in this regard.
Author Bio: I am Randy Gonzales. I am the President of Elite Sales Inc, rigging equipment and wire rope distribution company based in Miami, Tampa, Houston, and Dyer. I have more than 30 years of experience in the distribution and supply of the industrial hardware industry.