Eliminating Single-Point Failures in a Supply Chain

The pandemic impacted businesses on a global scale. From the onset, it was survival of the fittest supply chain systems, as business owners learned that logistically some systems cannot sustain themselves. The time of uncertainty brought to the surface single-points of failure that completely shut down entire enterprises for a short period, long term, and even forever.

A single point of failure (SPOF) is a flaw in a system, or component of that system, that has the potential risk of leading to a malfunction that causes the entire system to shut down. It could be anything from a risky hire to an undesirable location. Anything that may cause a rift in the processes of the business that will harm the overall structure. Now some SPOFs go unnoticed in the best of times. When the company foundation is strong, when team morale feeds great thinkers plus doers, or when profits are increasing. But many executives would agree that the pandemic was simply the worst of times.

The question is, when SPOFs are revealed, how will your company pivot to exceed or match the previous year’s revenue goals. What can be sacrificed in order to keep the business afloat. In ecommerce, how do you keep your customers happy!

Working with overseas manufacturers has been a cost-effective avenue for ecommerce businesses everywhere. However, in the process of configuration, we learn that the process is laden with flaws and mishaps like time difference, language barriers and shipping delays. When you finally learn the lead time for handling business with overseas manufacturers it’s easy to build your entire work system around that entity.

This is a single point of failure. To build your processes around an overseas manufacture allows for major time errors. When that entity has its own SPOF, interruptions or issues than your processes are disrupted as well. A plausible solution is to have a manufacturer in the same country as you to combat timing issue. Doubling up, rather than canceling out either manufacturer can be both cost-effective and timely. For example, the overseas manufacturer can get started on the majority of resources or products that are to be shipped. Halfway into the time it takes to ship products from the overseas manufacturer, is when the local manufacturer should get started on a feasible amount of product shipments. Now if anything were to interrupt the process overseas, you can deploy the local manufacturer to take on the work instead.

Considering you are now employing back-up vendors for your processes and programs to be completed efficiently, ideally you would want to be transparent with all parties involved. Your manufacturers do not want to lose your business, just as much as you do not want to lose out on business because of SPOFs. It is encouraged to be transparent and upfront with the vendors you work with. Tell them you have employed other vendors and services to complete the job more efficiently. Without giving too much away, or placing blame, share the reasons why this works for your business. Your honesty may put you in a position to negotiate your contract.

Transparency also forces your business partners to be honest in regards to what they can offer and costs permitted to complete that work. Now you have the ability to create better processes for your business, reduce SPOFs and amplify your business practices.

Sometimes you don’t know what you and your team are capable of until you have been put through the ringer. In any business, you are always learning about the industry at hand, but also learning new things every day. It’s important to remain agile in order to pivot quickly or “fail fast”, and pick yourself back up again. Outside of employing external vendors, have you considered what your team can do to make the business grow?

Learn the full breadth of your business and the scope of work that the pillars of your business entails. You’d be surprised what aspects are easier to manage in-house. Maybe you can pick up the slack where the SPOF left a rift. Talk to your banking partners, legal team, and employees to educate yourself. Sometimes you’re not fully aware of all that your bank offers, and funds can be allocated differently. The legal team may have some insight on your contracts that gives you the freedom to act in a way that is beneficial for everyone. Nurture your team in the face of challenges and learn their personal and professional goals. New or different tasks may align with the vision they have for their career.