▪ Fund raw materials purchases for
small suppliers trying to fulfill
unusually large orders.
▪ Consider the pros and cons of greater
vertical integration with key customers.
CUSTOMERS
▪ Draft corporate policies regarding how much business any one customer can command.
▪ Limit the amount of capacity that
will be devoted to top tier customers.
▪ Track key customers’ financial
stability on an ongoing basis.
▪ Monitor/manage customer
accounts receivable.
▪ Evaluate the mutual benefit of
joint ventures with selected customers.
▪ Manage inventory holdings carefully,
carrying sufficient stock to maintain high
service levels yet avoiding overbuilding.
Consider using postponement whenever
practical.
▪ Arrange with peers (or even competitors) for overflow storage space availability.
▪ Invest in one or more distribution
centers that can take the heat off a disaster
at headquarters.
▪ Build a DC network that can support
order fulfillment to a single customer
from any one of the facilities.
▪ Stay abreast of industrial space markets against future long-term or temporary needs.
▪ Build extra manufacturing capacity
into multiple plant sites to allow for shifts
in production.
▪ Design plants consistently for ease of
handling volume/product shifts.
▪ Pre-arrange backup from third parties
to backstop/augment fleet operations.
▪ Maintain carrier portfolios that permit shifting volumes from one to another
(without carrying excess candidates and
diluting volume economies).
▪ Be “easy to do business with” in dealings with suppliers, customers, and service providers (without being a patsy).
BOTTOM LINE
In short, be prepared, be proactive, be fair.
You will have gone a long way toward
blunting the consequences of the myriad
events that can interrupt the flow of
goods from your suppliers, through you,
to your customers.
But don’t stop there. Buy time with
these interim tactical moves to seriously
prepare for “The Big One,” as they say in
California. Unfortunately, The Big One is
not confined to California. We’ll all have
Big Ones to face sooner or later. ;
Art van Bodegraven, practice leader at S4 Consulting, may
be reached at (614) 336-0346 or avan@columbus.rr.com.
You can read his blog at http://blogs.dcvelocity.com/
the_art_of_art/. Kenneth B. Ackerman, president of The
Ackerman Company, can be reached at (614) 488-3165 or
ken@warehousing-forum.com.
