In an ever-changing environment global supply chain disruption is becoming a certainty.
For your business, the risks are widespread. Natural disasters can lead to material shortages, in turn driving prices up and causing stock outs.
Factory closures, pandemics or weather events, affecting manufacturing, fulfilment and distribution can cost your business time and money.
A resilient supply chain will reduce the impact to supply chain disruption. Supply chain resilience is simply a supply chain's ability to react, adapt and recover. The more resilient your supply chain is, the better your business will fair when crisis hits. Resilience is necessary because disruptions today are more about when than if, and because most supply chains are long, complex and global, disruptions are felt by many, not just a few.
To ensure supply in an increasingly volatile business landscape, companies supply chain resilience can be strengthened by increasing inventory levels (buffer inventory) of raw material, work-in-progress, and the final product.
Buffer inventory (also known as safety stock) is surplus inventory. By maintaining a surplus you are less likely to run out if your supply chain is disrupted or if demand suddenly increases. It's the most straightforward way to build resilience and gives you some breathing room in your business’s operating rhythm.
Holding buffer inventory is relatively simple, but it has its challenges. Its cost (in both material and management) is often seen as a drain on financial resources. Capital investment in surplus stock reduces the flexibility of a business’s critical working capital.
To tackle the cashflow impact of carrying surplus inventory, choose a supply chain partner that can provide the necessary means to build surplus inventory without the financial constraints.
Talk to WeFundTrade about how this can be done without collateral security, without company guarantees, without personal guarantees and build the resilience in your supply chain to enable your business to reach its potential and optimise new business opportunities.