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Three Tips to Manage Your Supply Chain During COVID-19
The coronavirus brought manufacturing in China to a standstill and as a result, the global shipping industry was significantly affected. Whether you’re a manufacturer who suddenly couldn’t fulfill orders or a business that couldn’t receive supplies, it’s been a tough situation. If you’re running (or thinking about launching) a crowdfunding campaign, supply chain issues could cause problems for your post-campaign fulfillment process. So, we’ve put together a few tips that will help you navigate supply chain disruptions. Now, whether you’re dealing with problems caused by the coronavirus or some other factor, you’ll be ready to keep fulfilling your campaign.
Through February, supply chains in and out of China were almost completely curtailed due to a drop in demand. Shipping lines in the region were forced to run more blank (canceled) sailings, and air freight couriers slashed flights and capacity. This was compounded by airlines cutting routes by up to 90%, which reduced cargo capacity on passenger flights. This meant that many campaigns who were producing goods in China couldn’t ship them out to their backers.
Since then, as China’s factories have started operating again, we’ve seen a spike in air freight rates. That’s because there simply aren’t enough planes to manage the increased demand for air cargo. As a result, even if campaigns were able to get their goods, they were being forced to pay significantly higher fees to get them shipped to other countries.
If the drop in cargo capacity and increase in freight rates are an issue for your crowdfunding campaign, don’t worry. There are still ways for you to find crowdfunding success by ensuring your orders are fulfilled. Just follow the tips below and you’ll be able to protect your campaign – business – no matter what unforeseen circumstances you’re facing.
3 Ways to Maintain Your Supply Chain with COVID-19
1. Communication is Key
In times of uncertainty, it’s crucial to make sure everyone knows what’s happening. This will allow everyone to feel that the situation is being dealt with appropriately. This is especially true with crowdfunding, since your backers will have a vested interest in your campaign.
- Maintain transparent communications with your backers so that they always know what’s happening with your campaign. They have invested in your business and it’s only fair that you tell them what’s happening at every stage of the process. If you’re facing manufacturing or shipping delays, they should know as soon as possible.
- If your campaign requires things to be manufactured, get in touch with your suppliers and manufacturers to make sure things are on track or you can be proactive about any problems that may crop up.
- If you have stakeholders in your campaign, it’s important to keep them up-to-date with whatever’s happening so they can raise concerns or make suggestions.
2. Think Ahead
They say the best defense is a good offense, and that’s certainly the case when you’re facing an uncertain situation. When something goes wrong, you should already have a plan-of-action in place. But even if you don’t, you should plan carefully to get through it unscathed. This is perhaps even more important in crowdfunding since the success of your campaign depends on things going well – if they don’t, you need to already know what you’re going to do to fix it.
- Make sure you’ve figured out a game plan for post-campaign fulfillment – and that you have accounted for this in your budget and funding goals. The last thing you want is to realize you can’t fulfill your campaign orders because you’ve run out of money.
- If you know you need to get supplies for your campaign or have products shipped, spend some time thinking through various worst-case-scenarios that could affect your supply chain and figure out how to deal with them.
- Look at whether diversifying your suppliers or manufacturers could be useful. For example, if you know your campaign will receive orders from different parts of the world, you could think about finding regional bases so that it’s faster and cheaper for you to fulfill your campaign orders.
- Do your research and look for alternative solutions to fulfill your campaign. You may even find that these options work better for you in the long term. At the moment, trucking to Hong Kong and then looking for outward solutions could be a good option.
- Get insurance. This is always a good idea.
3. Make a Budget
Hopefully, you had set aside a just-in-case budget to make sure you could get through any issues that may crop up in your campaign. This will be very useful if you suddenly come up against supply chain disruptions, as has been the case with the COVID-19 pandemic. Right now, many companies have been forced to use indirect routes and premium services to ensure that their goods are getting where they need to go – even Jaguar was shipping car parts from China in suitcases on commercial flights to keep their UK production line going. Others are even opting for express services for urgent shipments since these are operating almost normally.
If your campaign involves getting goods to your backers, you may find yourself paying extra costs in order to get your orders fulfilled in the current climate. As we’ve mentioned, air freight rates have spiked in recent weeks because of the fact that air cargo capacity has reached a three-year low. As a crowdfunder, you would probably be relying on air services to send goods to your backers after your campaign. So, you should expect to pay more than you normally would.
Of course, all of this is going to cost you. When things go wrong, money is often the quickest way to fix them, at least temporarily. If you have a budget prepared for this, you’ll weather the storm just fine. Even if you’re in the thick of a campaign and weren’t quite ready for the financial hit, a little careful planning now will keep you from the worst effects and ensure that you campaign is still a success.
Some Final Words
Disruptions to your supply chain can mean big problems for your crowdfunding campaign. But the effects don’t have to be catastrophic. If you plan ahead and remain flexible, you’ll find ways to maintain your shipping and fulfill your orders to your backers, no matter what happens.
If you’re like more information on how the coronavirus is affecting logistics, please click here.
