How SMBs Can Build Better Supply Chain Resilience

Ben Hussey is the co-CEO of Katana Cloud Inventory.

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The Strait of Hormuz crisis, which effectively closed one of the world's main shipping routes this past February, forced product businesses to rethink their operations. In the weeks that have followed, we noticed a clear trend among the SMBs we work with: counting stock and placing orders in response to the news instead of working from an existing plan.

That's reactive purchasing. It's expensive both in margin and in decision quality, and it’s a pattern that shows up every time there's supply chain uncertainty.

Why SMBs Have Less Runway Than They Think

What the Hormuz crisis made visible, beyond the immediate shipping headlines, is how little supply redundancy most product businesses carry. McKinsey's Supply Chain Risk Pulse 2025 found that just 42% of senior supply chain executives can see beyond their tier-one suppliers. Most SMBs are working with even less: Single-supplier relationships per SKU are common, with no immediate alternative if that source goes down. Without a dedicated procurement team, single-sourcing is usually the only practical choice.

Large enterprises build procurement infrastructure specifically for scenarios like this: dual-sourced supply chains and dedicated risk teams. For most SMBs, that's not realistic, and it doesn't need to be. But it does mean the main thing a product business has working in its favor when supply gets uncertain is time—specifically, how much sits between when a problem becomes visible and when it hits the production floor. That planning horizon is the margin most product businesses are working with, and right now it's being compressed from both sides.

The crisis also arrived on top of an already difficult environment. Tariff shifts had already pushed businesses to reassess sourcing costs and supplier relationships. The Hormuz disruption added lead time uncertainty and input cost volatility on top of that. For businesses already stretched on planning, the combination was hard to absorb—and harder still to respond to without a clear picture of where they stood.​

How To Prepare Your Operation Before Conditions Change

The good news is there’s already something SMBs can do to prepare for future disruptions. There are two concrete steps worth taking, and both come down to knowing your own operation before you're under pressure.

The first is qualifying a backup supplier for your most critical components before you need one. Getting properly set up with a second source takes time—you’ll need to place a trial order and learn about their lead times. This is far easier to do during a calm period than in the middle of a crisis—and you'll be set to place a repeat order the moment a primary supplier fails. Enterprises do this across their whole supply base, but an SMB doesn't need to go that far.

The second is changing your reorder process from a fixed schedule to consumption signals. Most SMBs reorder on a calendar, every 30 days or every quarter, no matter how much they’ve used. When there’s a disruption, it's easier for stock to run out before the next planned order, or cash to get tied up in inventory that isn't selling. Instead, set reorder points using real usage data and lead times. Track how much you use of each item, not just sales, because scrap, rework and parts used across products all count.

Shorten Your Response Time In Advance

Both of those steps come back to the same idea: knowing your operation well enough to act before a disruption forces your hand. Tracking average order volumes and supplier lead times doesn’t need a dedicated analyst or specialist software, and it changes how a business responds when conditions change.

According to McKinsey's 2024 Global Supply Chain Leader Survey, the average time to plan and execute a disruption response is two weeks.

The Hormuz crisis caught a lot of product businesses off guard, including ones that weren't sourcing from the region at all. Those two weeks looked different for companies that already knew which products were exposed and how long their stock would hold. When the news broke, they could check the impact and make the necessary changes—be it reaching out to suppliers or adjusting production schedules—right away.

That operational clarity doesn't come from anticipating the crisis, because nobody does. Even the best data can't warn you about a strait closing or a sudden drop in purchasing power. You get that kind of clarity from keeping a current, accurate picture of your inventory position as a matter of routine.

The Hormuz situation will eventually resolve. The underlying dynamic—SMBs carrying concentrated supply risk with limited planning infrastructure—doesn't resolve with it. Crisis resilience is almost entirely a function of decisions made during calm periods. The planning horizon businesses build before a crisis is the one they'll be able to use during one.​

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