There are many forms of risk to the supply chain. There is a risk of missing parts or components, security breaches, and logistic delays or problems. There is even an ongoing risk of market volatility. This is a concern that has become even more pronounced in recent years due to the Covid-19 pandemic and the industry-wide shortage of components such as semiconductors.
There are so many ways that operations can be interrupted, Risk management should be a priority for all supply chains..
- Understand that risk assessment and management is an ongoing process
Thorough risk assessment is the first part of a risk management strategy, but the results are not forever relevant. As the market changes, so does the threat to your business. This is why risk management and assessment need to be an ongoing process to best prepare for the current or future situation. Even if your business hasn’t changed, the state of the market or industry may have changed.
By mapping all potential threats at each point in the chain and developing an emergency response plan for all identified risks, you are fully aware of all the risks that may challenge your supply chain operations. is needed.
If all suppliers operate in the same region, many issues that affect one supplier can affect all suppliers. This is especially true when there are travel and trade restrictions, as seen in the Covid pandemic. Global diversification of supply networks increases the likelihood that a source of components can be maintained, no matter what restrictions are in place.
You may also be able to reduce the price of certain components or improve access to them by using suppliers from other countries.
- Create a network of trusted backup suppliers
To eliminate uncertainty, we need to strive to build strong relationships with all our suppliers. In many cases, companies in the supply chain are anxious for long-standing partnerships. However, no matter how reliable the supplier is, factors outside the control of the supplier can cause significant confusion.
For this reason, you need to create a network of trusted backup suppliers for all products or components. These backups can provide a source of hard-to-find components when they’re missing, even if they don’t offer as good deals as the major suppliers.
- Update your business
Investing in the latest industrial technology is rarely a bad thing for businesses. For one thing, older systems and software are far more vulnerable to security breaches and pose a significant risk to overall operations. AI systems and IoT devices can also protect users from future disruptions, such as when the number of employees in the workplace needs to be limited in order to maintain social distance by allowing remote control of specific processes. increase.
These systems can automate processes such as inventory orders and management tasks, and can also streamline other processes that make your business more effective. This is especially important if you have limited cash flow. Keep in mind that each new technology you deploy requires your own risk assessment.
- Maintain visibility of your end-to-end supply chain
There are so many operational stages in the supply chain, each with its own risks, so even if the problem may have been addressed before it reached that stage, know until the problem has a direct impact on your business. Problems can occur before you know it.
The sooner you notice a problem, the more you can fix it and prevent delays in production or delivery of the final product.This is where the end-to-end supply chain resides Visibility You can track the progress of all products in stock, from raw materials to final delivery. You need to work with all your supply chain partners to achieve end-to-end visibility and find the best way for everyone to share and access important information.
Risk management is not a one-time task, but a continuous strategy of continuous assessment and adaptation. However, you can make adjustments to create a more resilient supply chain when new risks are identified, such as maintaining visibility, updating technology, or creating a diverse network of backup suppliers.
https://epsnews.com/2022/05/23/list-of-5-ways-to-manage-supply-chain-risk-epsnews/ List of 5 ways to mitigate supply chain risk