Supply Chain Planning in a Volatile World: Mitigating Supplier Risk and Material Shortages

Volatility is no longer an occasional challenge for supply chains; it's the new environment in which we operate. The stakes are particularly high for snack manufacturers, where ingredient availability and material readiness can make or break production schedules and impact whether store shelves can be stocked. Sudden shortages of corn, potatoes, oil, seasonings, and packaging materials are constant risks that leaders must navigate.

Having spent decades in supply chain leadership roles at Frito-Lay and The Clorox Company, I've seen firsthand how fragile even the strongest supply chains can be when disruptions occur. What separates companies that recover quickly and thrive in volatility is not luck; it's preparation. Specifically, it's the ability to model risks that lead to disruption, leverage those learnings into optimized sourcing strategies, and proactively plan for continuity when suppliers experience issues.

The Rising Cost of Supplier Volatility

A poor cocoa harvest raises global prices, squeezing margins. Resin shortages lengthen packaging lead times, threatening customer service levels. Labor unrest slows shipments through critical ports. While each event may be isolated, the combined effect can derail even the most carefully built operating plan.

CPOs and operations leaders in the snack sector don't just face whether ingredients will arrive; they must constantly anticipate when they will arrive, in what quantity, and at what cost. Traditional planning approaches, built on static spreadsheets or rigid ERP outputs, don't provide the insights to answer these questions confidently.

Planning for "Just in Case"

This is where modern supply chain planning shines—by letting planners model multiple "what if" scenarios before they happen. What if the price of sugar jumps 20%? What if packaging suppliers push lead times from six to twelve weeks? What if a key supplier misses half of next month's shipment?

By running these scenarios in advance, procurement and operations teams can make informed choices about dual sourcing, inventory buffers, or alternate suppliers long before a disruption becomes a crisis.

And let me add something personal here: I've walked in your shoes and know this can be challenging. I wish solutions like ketteQ were around back then. The ability to simulate multiple demand, supply, and inventory scenarios to anticipate supplier failures or ingredient shortages would have saved my teams countless late nights and last-minute scrambling—not to mention the impact on customers, consumers, the P&L, and the balance sheet.

Supplier Flexibility as a Strategic Asset

At Clorox and Frito-Lay, we recognized that flexibility with suppliers was a strategic advantage. If one source wasn't available, another could step in. That "just in case" mindset is even more critical today.

Like the adaptive approaches deployed by ketteQ's planning system, these capabilities help institutionalize flexibility. They can monitor supplier performance, track commodity market signals, and flag early warnings when a partner may be at risk. Instead of weeks of manual analysis, procurement leaders can quickly see which alternatives are viable, how switching affects costs, and how to adjust production schedules.

Building Resilience Into the System

The truth is, resilience cannot be improvised during a crisis. It must be designed into the supply chain. For snack manufacturers, this means strengthening four areas, all driven by an adaptive planning capability like ketteQ:

• Scenario Modeling: Stress-testing supply chain plans against failures, commodity cost swings, and logistics delays.

• Probabilistic Forecasting: Planning against a range of possible outcomes, not just one assumption.

• Supplier Collaboration: Sharing visibility with suppliers around capacity, lead times, and risks.

• Dynamic Sourcing: Developing the agility to shift quickly between suppliers or regions as conditions change.

When these capabilities are embedded in everyday operations via adaptive planning systems like ketteQ, companies are not just surviving disruptions; they're thriving in spite of them.

Your Takeaways

The next disruption is not a distant possibility; it's a certainty. Ingredient price volatility, material shortages, and supplier performance risks will continue to test even the best-run operations. However, snack manufacturers can turn volatility into a source of resilience and strength by preparing for scenarios, building flexibility, and strengthening supplier relationships.

At the end of the day, customers don't care about the challenges behind the scenes—they care that the product is on the shelf. Continuity matters most.

Mehr erfahren

The themes in this blog are just the beginning. To dive deeper into how snack manufacturers can mitigate supplier risk, strengthen forecasting, and manage inventory more effectively, join SNAC International's upcoming webinar:

Smarter Forecasting, Leaner Inventory: The AI Advantage for Snack Supply Chains

We'll explore these challenges and solutions in greater detail, with practical strategies and AI-driven approaches to build resilience into your supply chain. Register today to secure your spot.