Supply chains are comprised of technology, logistics and people coordinating with each other around the world. They are powerful tools, but there are numerous risks that can threaten the health and stability of any supply chain. It’s important to identify what poses threats to your supply chain and be prepared. With good planning, you can develop ways to mitigate the impacts of supply chain risk.
Natural disasters can plague local towns and global supply chains. Moreover, they can be problematic for a company’s reputation and can risk their brand status if products are not delivered, leading to a ream of customer complaints. There is no way to avoid a natural disaster but there are ways to prepare your business and protect your inventory stock. For example, buying supply chain disruption insurance can help with net income protection. This can include any loss incurred from damaged inventory stock that can’t be sold or operational expenses that carry on after a disruption.
Train your team properly on how to respond to inclement weather events. Make a plan to contact impacted stakeholders including your employees, customers, suppliers and distribution teams. Keep people informed and let them know when your plan to be up and running again. Manage expectations and be honest about your inventory stock and if some customers should expect delays in their purchased merchandise.
In the age of high-tech communications and distribution, it’s important to be wary of cybersecurity. Supply chains can be plagued with cyber-attacks that can lead to operational shut downs and financial loss. If a system gets disrupted it can bring supply chain logistics to a halt. Moreover, it can take a long time to repair the system and get it up and running again. Be aware of what cyber-crime can do to your business and take precautions to keep your cyber operations safe. Educate employees and bring specialised people on board to ensure your cyber safety.
When it comes to global supply chains, there will be a variety of different cultures and business philosophies intertwined with the production. It’s important to look at the health and sustainability of the suppliers you source from. Depending on how they operate, their operations could negatively affect the water, air and soil quality. Large industrial production might also lead to emissions, toxins and harmful waste being emitted into the atmosphere. Build a relationship with your supplier and keep tabs on their environmental practices and regulations.
There are numerous other supply chain risks including potential problems surrounding legal and financial issues, socio-political problems, labour risk, project organisation and human behaviour risk. It’s important to be aware that a multitude of factors can put your supply chain at risk. Conduct supply risk management activities and seek educational tools to better protect your company.