5 Ways of Effectively Navigating Supply Chain Disruptions How to safely steer your corporate ship's supply-chain, no matter how turbulent the seas.

By Vincent Tricarico

Opinions expressed by Entrepreneur contributors are their own.

In the 1990s and early 2000s — and most notably since China's accession to the World Trade Organization on December 11, 2001 — a significant number of companies globalized sourcing and production to reduce costs. In most cases, this meant relying heavily on China, India and other overseas suppliers. According to the Brookings Institution, this move exposed U.S. companies to an increasing number and variety of risks, including geopolitical unrest, labor disputes, extreme weather events and cyber attacks. In addition, the recent global health crisis uncovered additional vulnerabilities in the supply chain, chiefly those caused by reliance on a single country or supplier. In fact, the U.S. Chamber of Commerce notes that many manufacturers are now acknowledging that they cannot and should not rely on a single source for any critical need.

But how to address this?

1. Maintain diversity

Make sure that you have multiple vendors in your supply chain, locally and internationally, and both primary and backup. It's also important to have a stringent list of criteria to follow when selecting them, including lead time, pricing, a thorough quality audit and a facility tour. And, since it's best to select a supplier with strengths aligned to your business's wherever possible, good communication is paramount in order to understand how to select one supplier over another. In my experience, slow response time is the biggest tell-tale sign that a candidate will not fit in a model.

Related: How to Prepare for Major Supply Chain Disruption

2. Communicate effectively with customers

Honest and open communication with customers is crucial, and the ability to proactively update them requires a strong and experienced support team. One way to stay ahead of the curve is to proactively ask for updates from suppliers: these will help you inform customers earlier in the process whether a material will have a longer-than-expected delivery time. If need be, you can then pursue alternative options.

3. Bake risk management into the process

Risk management can be incorporated into your supply chain process in two ways: a requirement to engage in planning discussions that help minimize fire-drill orders, and diversifying your supply chain so that you don't have all eggs in one basket. For example, in the natural products industry, it's best to have two vendors who are great at protein, another two who are good at softgels. Why? Both of these are items that can be challenging to source competitively.

Related: Overcoming the COVID-19 Supply Chain Strain

4. Commit to having good data

Train your people, standardize your data structure, and allow your team to add input on solutions you implement. However, you must enforce the procedures put into place; the only way someone is going to know that mistakes have been made is by addressing them head-on.

5. Build strong relationships with suppliers and manufacturing partners

Good relationships start with trust. Remember that suppliers are your partners, so it's important to take your commitments (e.g., payments) very seriously. In return, expect the same level of commitment from them. Constant but respectful follow-ups (including scheduled times to speak) help to foster this dynamic: this way vendors and suppliers will always know when they need to communicate with you.

Vincent Tricarico

Entrepreneur Leadership Network® Contributor

EVP for Twinlab Consolidation Corporation and NutraScience Labs

Vincent Tricarico is an executive in the dietary supplement industry and is well-known for his ability to consistently build and grow successful teams that produce results. He currently serves as EVP for Twinlab Consolidation Corporation and NutraScience Labs.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Branding

How to Build a Strong Brand Identity for Your Early-Stage Startup

Branding might not be your first priority, but neglecting it can hurt your startup. A strong brand identity early on sets the stage for marketing success.

Science & Technology

From Data to Destiny — How AI Can Turbocharge Your Business Future

Are you ready to embrace the power of AI with trusted data? Let's transform challenges into opportunities and propel your business into the future.

Business News

Elon Musk's DOGE Is Hiring People Eager to 'Work Long Hours' to Eliminate 'Waste, Fraud and Abuse' in the Government. Here's How to Apply.

The Department of Government Efficiency is hiring U.S. citizens to help cut spending and headcounts in the federal government.

Business News

'Everyone Can Profit From It': What Is DeepSeek? China's 'Cheap' to Make AI Chatbot Climbs to the Top of Apple, Google U.S. App Stores

DeepSeek researchers claim it was developed for less than $6 million, a contrast to the $100 million it takes U.S. tech startups to create AI.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Business News

Uber's CEO Says Drivers Have About 10 Years Left Before They Will Be Replaced

Uber CEO Dara Khosrowshahi says the jobs of human drivers are safe for the next decade, but after that, another type of driver will take over.