Tips for Managing Supply Chain Risk
September 3, 2015
An unreliable or inconsistent supplier has the potential to cause any business—from a tiny restaurant to a huge estate—lasting damage. Successfully navigating the delicate balance of your business’ supply chain can present unique, never-ceasing challenges. To manage this ever-present risk, heed the following guidance when making any supply chain-related decisions:
- Observe each component of your business’ supply chain: materials, financial, operational and sales. Review and revise each operational avenue to ensure a more streamlined process.
- When researching product and raw material suppliers, weigh the listed cost against how reputable and reliable the supplier is to make the most cost effective decision for the long term.
- If your business utilises any subcontractors or outsources any of its operations, it is critical that you consider their effects on the health of your supply chain. Establish connections with alternative firms or organisations in case your current relationships sour or fail to deliver. Having backup suppliers is key to ensuring continued success.
- When choosing product and raw material suppliers, research who their suppliers are as well as their other clients in order to gauge the suppliers’ long-term reliability.
- Never assume that any of the operational avenues of your supply chain are infallible or permanent. Additionally, develop a scheme that outlines what should be done if any of the operational avenues—materials, financial, operational and sales—fail.
Information is one of the most vital tools you need to avoid supply chain disruptions. Collect as much data as possible on your suppliers and backups to ensure that your business is prepared in the event of a serious disruption.