Big shifts in stock price often occur due to a change in supply chain operations. Staying on top of supply chains and the requirements of manufacturers, retailers and consumers can prevent problems before they develop. Likewise, alleviating fluctuations in demand that hinder timely response and averting problems before they begin can be a stock price boon. Below are three prime examples of how a change to your supply chain can positively or negatively affect your bottom line.
Disruptions & Disasters
Inefficiency can be caused by a manufacturer delay, miscommunication between retailers and wholesalers, or variability in orders despite consistent consumer demand. Unexpected disturbances (natural disasters, material shortages, political conflict, trade restrictions) can also be problematic. An inflexible supply chain unable to cope with disturbances will suffer the consequences. Customers, as well as investors, seek reliability. If resources aren’t properly used and best practices are ignored, the inherent value of a company sinks. Being unprepared for disturbances in the supply chain not only negatively affects consumers but also your bottom line.
Optimizing Availability
If your supply chain is unprepared for the implementation of new technology and processes or overpromises on what it can deliver without being fully tested, your business will suffer, and along with it, investor patience. Understanding how to integrate new technologies to better deficiencies rather than overhauling your delivery model can save your company from losing investors. When sales slow or accessibility to product is hampered, stockholders believe their capital is not being put to good use. It’s integral to slowly introduce new advancements in optimization, rather than pushing through untested fixes that rupture what may not have been broken.
Increase ROI Through Successful Warehouse Slotting
A well-thought-out slotting strategy also enables businesses to minimize wasted space and maximize storage capacity within the warehouse. Increase ROI using the right tools, strategy and management plan with successful warehouse slotting.
Sustainability to Flexibility
Versatility in a supply chain is integral in keeping momentum in the face of an unexpected interruption, which is why more companies are adopting sustainable practices to quell supply chain interruptions while gaining a competitive advantage over competitors. Movements to produce supply chain facilities in pivotal areas and working with regional and international vendor partners to maintain a steady stream of products and resources not only benefits business budgets in the short term but improves shareholder sentiment in the long term.
Sustainability allows businesses to reduce costs over a lengthy period of time. The ability to address shortages before they become an issue produces more efficient corporate goals that can better engage problems as they arise while ensuring demand isn’t completely interrupted. Meeting consumer needs in the midst of the unexpected instills faith in your company and its bottom line.
Preparing for the Worst
It’s vital to look at each aspect of your supply chain and assess how best to improve each to stay ahead of the pitfalls. Ask yourself these key questions:
- Inventory: Is there enough? How much are we stocking? How much will we need if we’re cut off for weeks?
- People: Are we investing in training? Do we have the right personnel in place to address unexpected disruptions quickly and efficiently? Do we have open communication between pivotal personnel to strengthen relationships?
- Process: What contingent plans do we have in place? Is our stock at one distribution center or is it spread among multiple facilities? Are we investing enough in emergency preparedness?
- Technology: Do we have visibility among available stock? Does our various software and hardware update in real time? How easy is it to send needed stock?
Each failure falls to customer service. Being unable to meet the demands of the public, no matter the cause, is ultimately reflected in stock price. Promoting forward thinking can better your operations and inspire investor confidence, leading to strong returns and more lean practices. Being unafraid of exploring different methodologies to counter inevitable supply chain pitfalls will not only benefit your bottom line but also instill confidence in your investors.
Learn more about how enVista can help improve your supply chain.
