Why is supplier diversity crucial

Why is supplier diversity crucial

Blog Article

Multimodal transportation strategies in supply chain management can mitigate risks related to depending on a single mode.

To avoid taking on costs, various companies think about alternative paths. As an example, because of long delays at major international ports in a few African countries, some businesses encourage shippers to build up new tracks in addition to conventional paths. This plan identifies and utilises other lesser-used ports. Instead of counting on a single major commercial port, as soon as the shipping business notice heavy traffic, they redirect items to more efficient ports across the coast and then transport them inland via rail or road. In accordance with maritime experts, this strategy has its own benefits not just in alleviating pressure on overrun hubs, but also in the economic growth of rising markets. Business leaders like AD Ports Group CEO would probably agree with this view.

In supply chain management, interruption in just a route of a given transportation mode can somewhat impact the entire supply chain and, often times, even bring it to a halt. As such, company leaders like P&O Ferries CEO and Maersk CEO work hard to add flexibility into the mode of transportation they depend on in a proactive manner. For instance, some businesses utilise a versatile logistics strategy that relies on multiple modes of transportation. They encourage their logistic partners to mix up their mode of transport to add all modes: trucks, trains, motorcycles, bicycles, ships and even helicopters. Investing in multimodal transportation techniques including a mix of train, road and maritime transportation and also considering different geographical entry points minimises the vulnerabilities and dangers associated with depending on one mode.

Having a robust supply chain strategy could make firms more resilient to supply-chain disruptions. There are two kinds of supply management issues: the first has to do with the supplier side, namely supplier selection, supplier relationship, supply planning, transportation and logistics. The second one deals with demand management dilemmas. They are dilemmas linked to product launch, manufacturer product line administration, demand preparation, product prices and promotion planning. Therefore, what typical methods can companies use to improve their capability to sustain their operations each time a major interruption hits? Based on a current study, two strategies are increasingly proving to work each time a disruption happens. The first one is known as a flexible supply base, while the second one is known as economic supply incentives. Although many on the market would contend that sourcing from a single provider cuts costs, it can cause dilemmas as demand varies or in the case of a disruption. Hence, counting on multiple manufacturers can alleviate the danger associated with single sourcing. Having said that, economic supply incentives work when the buyer provides incentives to cause more companies to enter the market. The buyer could have more flexibility this way by moving production among manufacturers, particularly in markets where there exists a limited amount of vendors.