Every organization wants to avoid supply chain downtime, yet it’s rife throughout the industry. Delays and disruptions are all too common, but that doesn’t mean they’re unavoidable. Supply chains can prevent these scenarios by implementing the right strategies.
Even in the most efficient supply chains, there’s room to improve. Downtime costs $1 million or more per hour for 40% of organizations today, so businesses should aim for no downtime at all.
Here are eight strategies to help reach that goal.
1. Maximize Visibility
One of the most important steps in avoiding supply chain downtime is increasing transparency. If businesses had more real-time insight into their supply chain partners, they could see disruptions as they arise and adapt faster. These quick reactions can help mitigate or even eliminate downtime.
More than half of all businesses have poor supply chain visibility and 63% don’t use any technology to monitor them. The two are related. Supply chains can maximize their visibility by implementing more technologies like the internet of things (IoT) and artificial intelligence (AI).
IoT devices can provide real-time insights and AI can analyze this data to predict incoming disruptions. Supply chains should partner with businesses willing to implement more IoT technologies and share this data to gain comprehensive insights into their operations. When that happens, they can enable faster, more effective reactions.
2. Improve Workplace Safety
Workplace injuries are another leading cause of downtime. Responding to safety incidents translates into lost productivity and injured workers may be unable to work at their full capacity for days. If supply chains improved workplace safety, they’d enable higher productivity.
Fall hazards are some of the most important risks to address, as 20% of all workplace injuries come from falls. Using proper safety harnesses and lift platforms can help, but removing workers from hazards entirely is the safest option. Warehouses can use automated systems to handle the most dangerous work, like retrieving items from high shelves to minimize risks.
3. Employ Predictive Maintenance
Supply chains must also address machine maintenance. Equipment malfunctions make large industrial facilities lose 323 production hours annually, costing $172 million overall. Supply chain organizations can minimize these errors and their expenses by switching to predictive maintenance strategies.
While implementing predictive maintenance can be expensive, its long-term benefits outweigh the costs. By enabling need-based repair, these practices prevent unexpected, costly breakdowns while simultaneously eliminating downtime from unneeded repairs. Conventional preventive maintenance only addresses downtime from the former and run-to-failure approaches address neither.
Predictive maintenance will also improve safety, further reducing unplanned downtime. When equipment runs in better conditions, it avoids breakdowns or errors that could endanger employees.
4. Create Buffers
While supply chains should do all they can to prevent disruptions, some are unavoidable. Since it’s impossible to avoid unexpected situations entirely, supply chain organizations should ensure
they can maintain productivity when things don’t go as planned. Buffers are a crucial part of these backup plans.
This practice goes against lean principles, but lean operations quickly fall apart in the face of disruption. Businesses don’t need massive reserve inventories, but they should avoid just-in-
time practices for some critical parts and products.
Companies should multiply their average daily use of a product by its average lead time. Then, they can subtract that total from the product of maximum daily sales and maximum lead time. The resulting answer is their ideal buffer inventory level for that product.
5. Keep Employees Engaged
Maintaining an engaged workforce is a crucial but often overlooked part of avoiding downtime. Having unengaged employees leads to turnover, hindering supply chains’ productivity, but an engaged workforce will be more productive. Businesses can maximize engagement by listening to and meeting their workers’ needs and wants.
Financial support like higher salaries and better benefits help, but they’re not the only ways to improve engagement. Since one in five American adults experience a mental health issue every year, businesses should also ensure they provide support for these concerns and encourage communication. Flexible schedules, opportunities for upward mobility, recognition for commendable work, and workplace fairness initiatives can also help.
6. Emphasize Training
Another employee-related strategy to prevent downtime is to train workers more thoroughly. As much as 70% of unplanned downtime results from human error, so more knowledgeable and skilled workers will translate into less downtime. Process improvements to simplify operations help prevent these mistakes, but businesses shouldn’t overlook the importance of training.
Onboarding and training should cover what to do in various unexpected or uncommon scenarios. If employees don’t know what to do when something unusual happens, they could take longer than needed to look into the situation or ask around. In contrast, if there’s a set protocol to follow, they can minimize downtime and adapt accordingly.
7. Diversify Suppliers
Single dependencies in supply chains can reduce operating costs, but they’re prone to disruption. Supply chain organizations should eliminate these if they want to minimize downtime, which means diversifying their suppliers. If businesses can source parts or products from multiple facilities, a disruption or delay at one won’t jeopardize the entire supply chain.
As supply chains diversify, they should re-shore or near-shore some of their sources. Shortening the distance between facilities can enable faster reactions if an unexpected scenario arises. International travel is also more likely to encounter difficulties, thanks to uneven regulations and government relationships between countries.
The need for diversification has become increasingly clear over the past few years. In 2021, 55% of supply chain leaders began dual sourcing raw materials to make their networks more resilient and 25% embraced regionalization.
8. Track Downtime
Regardless of what other steps a supply chain takes, it should monitor its downtime. When a disruption or delay occurs, businesses should record its source, how long it takes to resolve,
what fixed it, and similar data. This information will reveal ways supply chains can improve in the future.
Downtime tracking will also help organizations set relevant KPIs and benchmarks, guiding their long-term improvements. Since every operation is unique, this data is essential, as it provides real-world context for what does and doesn’t work in a specific scenario.
Maintaining Supply Chain Productivity Is Crucial
Every business wants to maximize productivity, but supply chains face more pressure than most. Disruptions in this industry will ripple across other companies and sectors, and by the same token, supply chain optimization will improve entire industries.
Downtime may be common, but it’s not necessarily unavoidable. If supply chain organizations implement these eight strategies, they can minimize unplanned downtime and mitigate it if it does occur.
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