Three tactics small businesses use to avoid the supply chain crunch

Published on Jan 11, 2022

Three tactics small businesses use to avoid the supply chain crunch


As a small business owner, it’s easy to get lost in the running of your company, ignoring more global concerns from time-to-time. The delays reported in the global supply chain, however, likely has very real impact on your business, making any updates daily viewing.


With the supply chain slowdowns, you face significant interruptions in how your product moves from a raw resource, to refinement, production, manufacturing and then eventually sold. This not only impacts when you can profit from your products, but also how you pay employees, make loan payments or fund growth.


Like most headaches over the past nearly two years, blame the pandemic for the global delays. When economies shut down and people stayed at home, suppliers and manufacturers had to cut back. Now, as demand for products have surged again, manufacturers and suppliers have had to quickly catch up. To make matters worse, your supply chain partners have also struggled to hire enough workers to meet demand.


Since small businesses lack the scale of conglomerates, the supply chain issues can potentially pinch more severely. You can’t always buy your way to the front of the line or use production in other areas of the world to encourage quicker service. Yet, while 55% of small businesses say that the supply chain delays have impacted their business, other firms have worked around the delays to continue to provide their wares.[i]


How? Well, it takes some foresight and risk management, but they are tactics any small business can implement.


Build a stockpile of supplies

In personal finance, having three-to-six months of expenses set aside in an emergency fund can stave off any unexpected surprises to the budget. For small businesses, while having a similar emergency fund is valuable, so is building a backlog of product to ensure sales even when purchasing your parts or supplies becomes difficult.


What you build a backlog of will depend on what you sell. For some manufacturers, certain parts are vital to the building process. Having such parts stored in a warehouse will ease concerns if, say, a manufacturing partner informs you that it will take two months longer than expected to ship that item. It’s particularly valuable method to stave off supply chain fears for non-perishable goods, where storage won’t destroy the item.


To build an emergency stash of supplies, incorporate it into your planning. During times when products are cheap and plentiful, purchase a few more than you normally would. Then have a place to safely store the product. Once you’ve reached a safe backlog of supplies, then you can funnel in newly made product to replace the backlog, so it never ages beyond the quality you and your customers expect.


Tap neighboring suppliers

Part of the reason for the slowdown in the supply chain has to do with the way manufacturers handled the pandemic. For some, they had to close for extensive periods of time to deal with COVID-19 outbreaks. Others faced country closures to contain the spread. It highlights the value of having a trusted group of local or regional suppliers as well.


Depending on the product and cost to manufacture, building in regional or local partners will aid in speeding up shipments, particularly when the global supply chain remains at a crawl. If you’re able to operate, then likely so will the local or regional suppliers. It reduces complexity in the creation process, easing any delays. It may not work for every product, but for many it can provide a boost in the speed of production.


Have back-ups in place

The more you can plan for contingencies, the safer your business will be when something goes awry. Many companies incorporate contingency plans to ensure they know exactly where to turn if a delay occurs, a natural disaster hits part of the supply chain or if a partner goes out of business, among other potential hiccups.


Within the contingency plan, also look to build a group of backup suppliers. You can interview this group and discuss ways that they can be used in emergencies. Having them available to tap will help ease any pressure on your current suppliers. It will also give you bargaining power with your current supplier that you may not have otherwise. Who knows, if the backup supplier performs well when you need it the most, they may become your permanent partner.


If you don’t have this group set, then it’s time to interview potential suppliers, especially if you haven’t yet felt the impact of the slowdown on your supply chain.


[i] “Inflation and Labor Shortage Suppress Small Business Confidence: CNBC/Momentive,” CNBC,




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