How to handle huge swings in supply chain demand

October 20, 2021 Christina DeBusk

A woman in a hard hat, looking at an ipad in a warehouse dealing with supply chain demand swings

Effectively managing your supply chain enables you to better meet your customer demands. Yet, supply chain management can be challenging because demand isn’t a constant. Sometimes there is naturally more demand for your products or services; other times there is less.

This has become especially important in the wake of the COVID-19 pandemic and the resulting worker shortages. The upcoming peak seasons may become even more volatile as supply chains are continually disrupted. 

How you handle these fluctuations in demand can help make or break your business. What’s the best approach for responding to demands that swell way beyond your norm?

Anticipate the swings the best you can

While some swings in demand may happen quickly, this doesn’t mean that they can’t be foreseen. If you manufacture Christmas trees, for instance, you can likely expect a swing in demand in November and December. Anticipating this in advance allows you to better prepare your business to handle this large swing.

Does this mean that all swings can be predicted? Not at all. The unexpected uptick in the demand for toilet paper and certain food items during the pandemic was a surprise to many.

But that doesn’t mean that you can’t see some of them coming. You may, as long as you’re paying attention to what is going on in the world around you.

Have a plan in place before you need it

It’s often said that one of the worst times to plan your response to a crisis is when you’re in the midst of it. The same is true with a huge swing in demand. If you want to increase the odds that you’ll emerge unscathed on the other side, you want a plan in place before you even need it.

The benefit of planning in advance is that it allows you the time to consider all of the actions that can be taken to reduce the stress (and lasting effects) of a major increase in demand.

It also reduces the likelihood that you’ll forget to do something that unintentionally creates a kink in your supply chain, limiting your ability to respond the way you would like.

Develop a list of contingent suppliers

Should a demand increase suddenly, you need access to the goods needed to meet that demand. Talk to your current vendors or suppliers to ask whether they can support an elevated demand increase. If not, it’s helpful to have a list of alternate suppliers who can help fill the gap.

Admittedly, this is a bit of a tightrope walk because you don’t want to upset the companies that you work with on a regular basis by looking somewhere else. But if they aren’t able to get you what you need when you need it, you may have no other choice.

Again, this is where a bit of forecasting and planning can help. If you give your current suppliers a long enough lead time, they may be able to meet your increased demand so you don’t have to seek out outside vendors.

Be ready to bolster your workforce

Not only do you need the goods to manage a boost in demand, but you also need a more enhanced workforce. Having all of the parts and pieces in the world does you no good if you have one there to put them together or to deliver them to the end customer.

Of course, you can’t just keep staff on the payroll in case an increase in demand should occur. This would drown your company financially. Instead, a better approach is to partner with a staff management firm that can bolster your workforce when needed.

This gives you immediate access to the workers needed to meet an increased demand without having to make them permanent employees or go through the entire hiring process—which can ultimately slow your response.

If you’re interested in learning more about this option, contact our SIMOS team today. We’d love to discuss your staffing options should you face a huge swing in demand, enabling you to craft a faster and more effective response.

If you want to prepare your business for the unexpected, download our free planning checklist. It can help you anticipate and plan for the peaks and valleys of the supply chain. 

About the Author

Christina M. DeBusk creates small business content for a variety of publications, some of which include Businessing Magazine, Compendent, Chiropractic Economics, and more. She is also the author behind the column, "The Successful Solopreneur.

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