Remedy for shortage of supply

Corzhens

Member
This is one hard nut to crack - when there is a shortage in supply, what remedy can you resort to? Especially if you are a supplier of raw materials that are used in factories or plants, delivery on time cannot be denied. But what if your own supplier failed to deliver so you have nothing to deliver to you client? One remedy that we used to do was to purchase from the competition. In retailing computer supplies, it was quite easy to source out from competitors because they would readily sell you... but at a premium so you have to buy on a loss. Do you have any other remedy in mind?
 

arunava2016

New member
Re: Remedy for shortage of supply

Shortage of supply is good for the market because it shows that the product is in high demand. Suppliers should never try to artificially make the demand supply ratio equal. It will spell doom to the industry in the long run. Imagine a scenario when the supply is more than the market demand and you are having a good stock accumulated. What will happen then, you will suffer from a poor investment-profit ratio!! And then you will suffer a big loss. Remember the market thrives on demand and all the suppliers should make a consensus not to try to find a impractical solution to it.
 

Norm

New member
Re: Remedy for shortage of supply

I think other than having backup storage it's pretty much your only option to source from competitors instead and it's something that has to be done even if you end up selling it at a loss because ultimately keeping your client satisfied and coming back for the next shipment is the bigger picture end goal. It does sting whenever it happens high because you always feel as though it was an avoidable situation but really sometimes we just run into some bad luck.
 

Vampa

New member
Re: Remedy for shortage of supply

. . . when there is a shortage in supply, what remedy can you resort to? Especially if you are a supplier of raw materials that are used in factories or plants, delivery on time cannot be denied.
It can be possible to tell if there will be a shortage in supply and that would give you some time to, if you can, for a while, import whatever it is you sell to factories so they'll always have what they need. While it can be costly since shortage in supplies also means a price increase in raw materials, you won't make any losses.
 

xTinx

New member
Re: Remedy for shortage of supply

I don't know about other companies but I do know that there are companies that have multiple suppliers for a single product. For instance,a restaurant may have A, B and C suppliers, A being the priority and B and C being backups. It all boils down to foresight. Before putting up a system, make sure you're able to imagine future scenarios and present a remedy for each of them.
 

Dropshipping

New member
Re: Remedy for shortage of supply

Even though we do not supply raw materials to factories but in our industry, right from the outset we maintain contact with at-least 3 suppliers and get the inquiry and rate finalized in advance and buy from 1 for the start. When the earlier one is not able to deliver due to some reason afterwards, we have the other suppliers ready and we simply continue the conversation with them and get the products delivered.

This ensures that there is no disruption in the supply and also we are ready with multiple vendors whenever we need them.
 

Norm

New member
Re: Remedy for shortage of supply

Even though we do not supply raw materials to factories but in our industry, right from the outset we maintain contact with at-least 3 suppliers and get the inquiry and rate finalized in advance and buy from 1 for the start. When the earlier one is not able to deliver due to some reason afterwards, we have the other suppliers ready and we simply continue the conversation with them and get the products delivered.

This ensures that there is no disruption in the supply and also we are ready with multiple vendors whenever we need them.
This is the best way to go about it I think as it ensures that you'll always have a source even when one of the options fail to deliver. I don't know if it's applicable to every form of supplier though as I imagine some may not be able to find alternative sources or for some reason their cycles may not be too conducive for backups but for the general majority I do think this is the best and safest method.
 

explorerx7

New member
Re: Remedy for shortage of supply

There will be options in for some shortage situations where there will be availability of the goods trough other than the usual suppliers or from competitors at s premium. However, the are some supplies which may only be obtained from a very limited supply source. This is a situation which sometimes results in production suspension and the business has no option but to just wait until the goods are in abundant supply once more.
 

Corzhens

Member
Re: Remedy for shortage of supply

I don't know about other companies but I do know that there are companies that have multiple suppliers for a single product. For instance,a restaurant may have A, B and C suppliers, A being the priority and B and C being backups. It all boils down to foresight. Before putting up a system, make sure you're able to imagine future scenarios and present a remedy for each of them.
For big companies with heavy consumption of products, I'm sure they have several suppliers for a particular item. But the problem arises when the company cannot split its orders because of the low volume. Take for example a restaurant that would order 10 pieces of chicken, it is not practical to have 2 suppliers for 5 chickens each. But I agree that it it foresight that matters most in business and that foresight is the x factor which can only be had by gifted people.
 
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