Most companies carefully plan their logistical operations to ensure they are cost effective, run smoothly and get products or raw materials where they need to be in a timely fashion. Developing the best strategies is critical - without proper management and optimization, operations can become too expensive or inefficient, resulting in supply chain breakdowns.
While a business owner may believe its logistical operations are flawless and will function smoothly no matter what the future holds, executives with this view may need to take a step back and analyze the downfalls of failing to take proper risk management strategies. Every firm needs a backup plan, even if it doesn't expect any major disruptions that hurt its shipping methods or deter the operations it hires to transport cargo.
Having a plan in place allows a business to prepare for the worst, even if operations haven't ever experienced a disruption. Holdups can be extremely costly and waste an enterprise's resources while it waits for a mess to be sorted out. There's no way to prevent natural disasters, terrorist attacks or political unrest, all of which can make it impossible for companies to use their usual logistical routes or carriers to get goods to market. However, having an emergency plan helps to ensure a company's revenue stream can remain consistent and consumers will not have to wait weeks to obtain the merchandise they're seeking.
Being able to have merchandise shipped out on a continuing basis, no matter what's happening in the world, is only one of the benefits to having a backup plan. Some carriers may increase their pricing to travel through extreme conditions or dangerous routes; having another option allows a business to enjoy the greatest cost savings possible during the shipment process.