Price Volatility and Shortages: Tips on how to stay on top of your organization supply chain

Shortages of supplies could mean delaying appointments and unnecessary stress in the workplace. Also, if a potential shortage catches you off guard, it could lead you scrambling to source supplies and have an excessive increase to your overhead expenses. 

We put together 3 tips on how we stay on top of potential shortages and price volatility. Hopefully you can find some benefit in the information.

1. Have 3 Go-To Suppliers (Minimum)

We all try our best to use one supplier for everything. From paper towels and gloves to sterilization indicators and disinfectants, it makes ordering a lot easier to put it under one roof during normal times...one account representative to deal with, one vendor to keep track of invoices and overall less shopping work involved.

However, during a time of shortages and price volatility, it could be risky for your business to not have an alternative supplier to turn too. You could end up paying higher prices than your competitors, putting you at a disadvantage due to you having to increase your prices. Or you could be put on supply allocation, which is quite stressful as you have to be the bad guy and start rationing supplies amongst your staff.

We like to have a minimum of 3 suppliers (more if possible) to shop from even during normal times. It not only helps with maintaining a solid supply chain, it also helps with keeping your vendors in check to ensure you are always getting the best available rates possible. Sure, it's more work in the short term having to stay up to date with multiple suppliers; however, in the long term you will reap the benefits of low overhead supply expenses. As a bonus, when your competitors are stressing out trying to deal with allocation and high prices during a time of market volatility, you can just smile and carry on as usual.

2. Monitor Inventory & Shop Often

When your essentials are in short supply or when prices are fluctuating, it's important to keep a close eye on your inventory and shop as frequently as you can to avoid getting caught paying higher prices or worse, getting caught with your pants down and running completely out. When you're shopping often, there are a ton of benefits and it doesn't always have to be a chore. 

For starters, if you're in constant communication with your sales reps, you get to know them better and build a partnership you can lean on versus you just being another client for them. Also, the more you shop and monitor your inventory you pick up on price increases and supply usage trends quicker providing you with a window of opportunity to decide if it's best to stock up on certain supplies. If you suspect prices will continue to rise and it's a heavy use item, it might be best to stockpile some just in case. I recommend hopping on your top 3 vendors websites often and browsing what’s in stock. By doing so you can be aware of the lead times on out of stock items or if there are any alternative products that could be of use to you in the meantime.

3. Ask Account/Sales Reps for Insider Information

Don’t be shy to ask your account reps if they have any insider information of what is happening behind the scenes with their own supply chain. Account reps take part in sales meetings on a weekly basis and are updated by their management if there are any interruptions to their product offerings. As well, good account reps will know if there are alternative products available that will suit your needs. The sooner you have this information, the quicker you can act to stay ahead and limit any future headaches.

We practice the above tips on a routine basis, and they are an essential part to our standard operating procedures. It's what allows us to stay on top of our procurement planning and ultimately to stay competitive–minimizing stress for our clients. 

We offer our clients a free-consultation to determine if there are any opportunities for cost savings in their supply chain.