7 Proven Strategies That Eliminate Downtime in the Supply Chain
Eliminating downtime is a concern for any business, but supply chains face more pressure than most. Disruptions and delays will ripple throughout the industries that rely on them, potentially causing massive losses. By the same logic, reducing supply chain downtime likewise reduces it elsewhere.
While most organizations likely understand the importance of eliminating logistics downtime, the path to that end is less clear. Frequent delays showcase considerable room for improvement in the world’s supply chains.
Thankfully, several companies have also found effective strategies for eliminating these delays. Here are seven of these proven methods.
1. Optimized Warehouse Layouts
Poor warehouse arrangements are easy to overlook, but they’re a common source of supply chain delays. A poorly laid-out warehouse slows the picking process and makes it harder to track inventory levels. With less insight into their stock, companies are more likely to run into shortages they could’ve otherwise avoided.
Lack of stock visibility is all too common an issue, with 43% of small businesses not tracking inventory. As a result, the U.S. retail industry has an inventory accuracy rate of just 63%. Without an accurate picture of stock levels, companies can’t expect to order new items in time, leading to delays.
Better warehouse layouts improve inventory visibility, informing more accurate orders. One of the most important changes to make is implementing an electronic tracking solution, like a warehouse management system (WMS). These systems will help keep track of stock levels, eliminating downtime from inventory issues.
2. Predictive Maintenance
Equipment breakdowns are another one of the most common causes of unplanned downtime. While these situations are common and highly disruptive, they also have a fairly straightforward solution. Supply chains should implement predictive maintenance systems to keep all machinery in optimal condition.
Predictive maintenance analyzes equipment performance data to determine when it will need upkeep. While this comes with high upfront costs from the necessary equipment, the results are impressive. Operating off these predictions lets facilities prevent unplanned downtime from breakdowns and unnecessary repairs.
These benefits aren’t just theoretical, either. Studies show that predictive maintenance increases equipment availability by 5%-15% and reduces maintenance costs by up to 25%. Those savings across an entire supply chain add to a tremendous reduction in downtime.
3. Distributed Sourcing
Another common source of downtime in supply chains is delays or interruptions from suppliers. Many supply chains get parts or products from a single source, which keeps costs down but exacerbates these disruptions. When an unforeseen event occurs at these suppliers, everything else comes to a standstill.
For example, in 2017, a fire at an auto part supplier in the Czech Republic stopped production. An automaker who relied on this plant as its single supplier consequently couldn’t produce 20,000 vehicles in time. Supply chains must embrace distributed sourcing to avoid massive disruptions like this.
When a supply chain has multiple suppliers, a shortage at one won’t affect the entire operation. Other companies can make up for it, and if not, the overall loss still won’t be as significant.
4. Contingency Plans
Similarly, supply chains must also create contingency plans for likely or potentially disruptive events. Companies can’t afford to expect that no unexpected circumstances will ever arise. Having a backup plan for any possible emergencies reduces downtime from these situations and shortens the recovery period.
Some emergency response plans can be relatively simple, but companies should still standardize and record them. For example, if a vehicle dies, drivers can start it without jumper cables fairly easily if need be. However, if there’s no standard practice in place for this situation, they may waste time thinking of what to do and who to contact first.
Having a specific, codified contingency plan ensures workers can respond quickly to any eventuality. The faster they can adapt, the less likely an unforeseen event is to cause significant downtime.
5. Employee Training
Some strategies to eliminate downtime are relatively straightforward but can have a significant impact. Employee training is the perfect example. While a single worker’s mistakes may not seem to have a considerable effect on overall operations, most downtime comes from user error.
Mistakes in data entry can lead to incorrect inventory information, causing order-related shortages. Similarly, machine usage errors can end in equipment failure, leading to downtime for repairs. Employee errors can cause substantial disruption, but that also means better training can prevent many stoppages.
Periodic refresher training can ensure workers remember proper techniques and best practices. Supply chains can also look to employees themselves for information on how to improve the training process. Workers can report what types of onboarding experiences they wish they had, revealing how to improve.
6. Emphasizing Workplace Safety
On a similar note, improving workplace safety can help eliminate supply chain downtime, too. On-the-job injuries have a considerable impact on productivity, resulting in 105 million lost days in 2019 alone. That figure doesn’t include non-disabling injuries, either, which may still hinder worker efficiency, making downtime more likely.
If supply chains can reduce employee injuries, they’ll decrease these days of lost work. One of the most important parts of improving safety is better safety training. When employees know what risks they face and how to avoid them, they’ll pay more attention to workplace hazards.
Other steps like automating the most dangerous tasks and using data analytics to find where most injuries occur will also help. Even seemingly small improvements can have a substantial effect on reduced downtime.
7. Improving Staff Communication
Another minor adjustment that can have significant ramifications is communication. Supply chains should ensure employees understand the causes of downtime and how they affect profits. This communication can help build a spirit of shared responsibility, helping workers understand their impact on the business as a whole.
Improving communication also means making it easier for staff to suggest improvements. Supply chains should reward employees whose suggestions lead to meaningful reductions in overall downtime. This will encourage more workers to take an active role in ensuring operations run as smoothly as possible.
Supply Chains Must Actively Reduce Downtime
Reducing downtime in the supply chain can minimize disruptions across an entire industry. Similarly, if supply chains don’t eliminate downtime, they could cause massive, far-reaching damage.
These seven strategies represent proven methods for eliminating downtime. Supply chains that implement them can become far more resilient and efficient.