Three lessons companies can learn from the supply chain crisis

1. When the supply chain is working well, nobody cares. It’s crucial to look for inefficiencies in the system even when there are no glaring issues.

Associate teaching professor of supply chain management Joe Walden said companies today have overlooked the importance of risk analysis and strategic planning. He said that when everything is going well in the supply chain, companies become complacent and don’t stop to think about what could go wrong and how it would impact the company.

A container ship off the coast of Baltimore, Maryland. Shipping by water on ships like these has gone up in price by 326% in 2021. Photo by David Dilbert from Pexels.

2. Successful companies are thinking of creative ways to circumvent issues resulting from supply chain backlogs.

Shipping by water has gone up in price by 326% this year. Walden said that while some companies are throwing up their hands in defeat, others are thinking of creative solutions to get their products on the shelves.

3. To maintain goodwill with customers, companies should avoid making promises they cannot keep.

The psychology of scarcity can benefit companies as it encourages people to buy more. In fact, companies try to re-create this fervor in typical years through Black Friday doorbuster sales and limited-run promotions. However, according to Li, this can be a trap if companies can’t deliver on their promises.

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KU School of Business

KU School of Business

Stories about the students, alumni, faculty and staff of the University of Kansas School of Business.