Creating a Contingency Plan

"I didn't see that coming.... Now what do we do?"

Contingency Planning: it's an articulated plan specifically for when things go wrong. The best way to avoid being "caught off guard" is to know what the threats for disaster are and have a plan created for dealing with it. The goal is to avoid ever being in a down position, losing the potential thousands of dollars, and experiencing the business-ruin that can accompany unpredicted events.
  • You must thoroughly understand the potential of identified risks
  • You must increase the capacity of the supply chain - within reasonable limits - to sustain and absorb disruption without serious impact
What does it mean to increase the capacity of your supply chain?  Essentially, you have to make sure there is no disruption on getting your product. Things happen. Storms delay shipments, machinery breaks. But if you've any longevity in the industry at all, you can probably sit down and establish a list of the most common potential problems. Once you have your list you can assemble a strategy.

What happens when your supplier can't deliver?

Without a contingency plan you are immediately starting to tally the loss when your supplier can't deliver. But with a plan in place, you simply shift to your second source. Dual-sourcing can save your business. You should double up on everything. Your sources should be very comparable, very equitable. Strive to find sources with similar costs and service so that at any time you can go with either source and expect the same situation. This is will result in a seamless transition and a total lack of costly disruption.

Evaluate your risk potential:
  • It's critical that you understand your supplier...what can they do? What can they not do? Understand them well and avoid relying on them for something they can't accomplish for you.
  • Understand your customer. Get to know them and evaluate their needs. Look at your own provision and see where you need to adjust. Solve their problem with the same attention you give to your own: the entire chain must be efficient and productive.
Use wise contingency planning to lessen the impact of inevitable issues. Choose multiple metal suppliers who emphasize lean production and attentive, customizable service. Unique Tool & Manufacturing is a domestic supplier that can reliably offer you continuous availability and quality product. Use suppliers that use lean production practices you can rely on them to deliver. If you'd like more information or to speak with someone who can help empower your business in today's metal manufacturing market call 1-734-850-1050 or send us a message using the contact form below.
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