With the increasing sharing of information and transparency due to the internet, customers are looking for a better experience. We live in an age where customers expect whatever they buy to reflect their values while using social media to showcase their shopping habits. Businesses are upping their game to meet their expectations of sustainability, diversity, and supply chain diversification.
What is supply chain diversification?
It is a term that deals with the strategy of manufacturing businesses to enlarge the range of suppliers they work with to increase their product choices when it comes to the supply chain. Working with larger suppliers allows manufacturers to operate in a flexible manner, thereby adapting to the ever-changing customer market.
Importance of Supply Chain Diversification
A company might decide to use supply chain diversification for various purposes. However, these benefits are broken into four areas, which we will discuss briefly.
Encouraging Innovation
Communicating with suppliers isn’t a one-way process where the producer places an order, and the supplier fulfills it. When you work with different suppliers, you can think beyond your company while encouraging innovation and more creative approaches.
Drives better approaches
When you have a diversified supplier base, it means you can easily become the reflection of the customers you serve. Broadening your geographical supplier bases allow you to offer competitive prices within the local level. Small-medium enterprises tend to be flexible and focused on their customer base compared to large global suppliers.
Cost savings
Another benefit of supply chain diversification is that it allows you to save costs. For instance, recent research shows that when you work with different suppliers, it helps to minimize the cost to a certain level. Interestingly, it is a fact that the biggest suppliers don’t always offer the best cost efficiency compared to small-medium businesses, which have a lot to offer to customers.
Stay ahead of competitors
It is never a secret that successful businesses look for opportunities to minimize the cost of operation. Strategically sourcing for raw materials, minimizing waste, and efficient processes helps to save more money while providing more scope to charge a competitive price. It means the competitive price is not more about price but about the ethics of growing concern for the environment.
How BackOrder Can Solve Your Out-of-Stock Pain Points
Out-of-stock situations can severely impact your sales and customer satisfaction, especially when your supply chain is disrupted. Here’s how BackOrder can help you address these critical pain points:
- Never Miss a Sale: BackOrder ensures that you never lose potential revenue by automatically switching products to backorder status when inventory reaches zero. This automation keeps sales flowing even when stock levels are low.
- Enhance Customer Experience: By keeping customers informed with customizable backorder notifications, you reduce frustration and build trust. Customers are more likely to wait for their desired products when they know exactly when they will be back in stock.
- Streamline Inventory Management: Integrating seamlessly with your IMS/ERP, BackOrder maintains your inventory management workflow without manual interventions. This ensures accurate inventory data and synchronization across all platforms.
- Flexible Application: Apply backorder settings to specific products or variants such as different sizes, colors, or materials. This flexibility allows you to manage inventory more effectively and cater to specific customer needs.
- Effective Inventory Planning: Set thresholds to control backorder quantities and plan your incoming stock more strategically. This proactive approach helps you manage stock levels and meet customer demand without overburdening your supply chain.
Implementing BigCommerce BackOrder can transform how you handle out-of-stock scenarios, keeping your customers happy and your sales steady, even during supply chain disruptions.
Risk of Supply Chain Diversification
There are several risks associated with supply chain continuity, including politics, electronic attacks, economy, and natural disasters. A lot of things can disrupt your supply chain if you don’t have a robust supply chain. These can disrupt your business and impact your operation, customer delivery, and cost money and time on your business.
However, with supply chain diversification, you can mitigate these risks by ensuring you have a solid supplier base to cater to your business. Nevertheless, to optimize risk management, you need to be strategic in choosing your suppliers. For further more please contact us!
