One of the first steps to making sure that your business can continue to grow is to identify and evaluate the possible risks facing your business. Identifying and assessing supply chain risk comes down to looking for the weak links in your supply chain. This may include natural hazards that are prevalent in your region, such as earthquakes, winter weather, or floods; as well as other disruptions that might occur in your area like a major power outage. Supply chain services can help you identify these weak links, and provide you with warehousing value-added services that can eliminate risk. Here is how you can find the weakest link in your company supply chain.
Talk to Your Vendors and Suppliers
Communicating with your vendors and suppliers is key to your success as a business. You should communicate any weaknesses that you have identified through your risk analysis. You should make sure that your vendors and suppliers understand the risks, so they can implement strategies to reducing them. When they are working together, you have a stronger supply chain.
Initiate Benchmarking and Devising Metrics
Supply chains that are the most effective have the most availability of goods, optimal levels of inventory, efficient transportation, and adequate warehousing dollars. Finding ways to improve in these areas means you need to know where you stand right now. You should consider and list the factors affecting availability, working capital, and cost. You should encourage your organization to do supply chain benchmarking and best practice analyses, and review these results on your own. You should devise metrics, ensuring they are accurate and functionally aligned. This will lead you to greater success. Ensure any tool claiming to evaluate customer service and assesses the company’s performance from the viewpoint of the customer. Then, you must ensure that the company’s best customers verify the effectiveness of the metrics.
Keep Up with Supply Chain Technologies and Trends
Another important step is to keep up with supply chain technologies and trends. Many of the most promising opportunities for the supply chain are made possible by sophisticated technologies. Getting up to speed with these technologies is something you need to take time to understand. Today’s supply chains are very complex, and entail cross functional participation. They are the most successful when they inspire the cooperation of external partners. New software has allowed companies to optimize the supply chain, specifically with distribution and production planning, inventory management, warehousing, and transportation systems. Radiofrequency identification (RFID) chips and systems are just one of the tools used in innovative ways for today’s supply chains. New technology also includes advanced barcodes and scanning, and coding to make processes more efficient and simple. If you take time to understand these new technologies, you will help your company avoid classic missteps.
Consider the Trade-Offs
Experts agree there’s a right way to incur and address supply chain risk. They consider cost and risk as variables that exist along a continuum, and that reducing one of them comes at the expense of increasing the other. It is important not to exclusively address costs, but also consider inventory needs and prepare for unanticipated events. Finding a way to forecast inventory can help you better manage processes, and this can be done using technology and management software.
Evaluate Your Supply Chain Links
After identifying your supply chain links, assess their vulnerability to hazards, and ensure that you have continuity plans in place for your business. Questions you should aim to answer include the following:
- Where are your key suppliers located and what risks are they likely to face? Are your suppliers based in a single location or have they diversified their risk with multiple ones?
- Do your key suppliers have a business continuity plan?
- Have any of your suppliers experienced an interruption in the past five years? How did they respond, and how did the issue affect their customers and clients?
- Do you have proactive, close relationships with their key suppliers? Are you aware of problems they may face? Can you work with them to minimize any possible disruptions?
- Do you need your key suppliers to stockpile an item or ingredient to ensure they can always provide it to you, despite interruptions?
- Can you find other ways to minimize possible supply chain disruptions?
Regularly Monitor Your Contractual Arrangements
Make sure you are regularly monitoring your contractual agreements. You should consider regular meetings, spot checks, or routine checks, which can help you ensure there are no issues that need to be resolved. These checks will also help you prevent any emerging risks. Doing your due diligence to make sure there are no issues in your supply chain will go a long way to preventing risks.
Now is the perfect time to make supply chain security enhancements a priority. The supply chain information risk assessment approach should be well structured. Your method should be driven by information, and focused on your suppliers, so it can be scalable and repeatable across your enterprise.
Get Help from Lean Supply Solutions
If you are looking for an experienced third-party logistics partner (3PL) to help you improve your supply chain strategy, give Lean Supply Solutions a call. We provide supply chain management in Vancouver, and we make ourselves aware of the rising trends in supply chain services as we strive to stay up to date. We commit to being aware of our clients’ operational challenges as they arise and help them get the most out of their processes. Our 3PL, packaging, and supply chain management can streamline your processes for better success. Lean Supply Solutions can offer consistent, accurate, and quality results by striving to ensure that the right products are provided to the right customers at the right time, while saving you money. To learn more about outsourcing to our 3PL distribution team, or to ask any questions, contact us today.