A detailed Risk Management Plan has always been a top priority for successful organizations. There are multiple factors that can affect your business, especially in the supply chain. A study conducted by the Business Continuity Institute concluded that, in 2015, supply chain disruption doubled in priority when compared to other enterprise disruptions inside a firm. Although many could argue that it is impossible to be prepared for every single situation of risk, it is possible to create an intelligent risk management plan – one that is secure and high performing in the supply chain.
Here are 5 tips that can help you Mitigate Risks in the Supply Chain:
1. Prepare Your Organization for Crisis Scenarios
The first step any organization should take is to analyze and evaluate the greatest number of potential chain disruption scenarios possible. Have a look at your business: what are some potential areas of risk exposure? What is the best way you and your employees can deal with those areas? It is extremely important that every member of an organization feels confident and prepared to deal with a possible disruption in the supply chain.
2. Ensure Supplier Quality and Diversify Suppliers
It is likely that your supplier's reputation will be tied to your business' reputation. Due to that, it is important to always ensure that your suppliers can provide a good quality service. Also, it is essential that organizations investigate how their suppliers source materials, interact with other partners and treat their employees. This will ensure that your business is not linked with any unexpected scandal.
If goods cannot be delivered in a timely manner, your supply chain becomes vulnerable. Because of that, it is important to always have a list of reliable secondary suppliers.
3. Be Aware of Suppliers' Risks
As for any other important aspect of an organization, you must research and analyze your suppliers' background thoroughly. What could potentially impact their ability to serve you? This includes political and economical conditions, regulations compliance or even, the possibility of a natural disaster.
4. Incorporate a reliable ERP system to your business
It can be difficult to keep track of all the regulations imposed on your business and those imposed on your supplier's business. ERP systems provide tools to manage risk – they are built with regulations in mind to help your business maintain compliance at every stage. Moreover, ERP systems allows users to predict events when it comes to demand and budget – this way, you can create a more reliable product development plan.
5. Be transparent and Review Potential Risks Periodically
Transparency will only strengthen your relationship with your stakeholders. It is important to always share valuable information and include partners in important changes within your organization.
Being prepared is the best way to avoid any potential supply chain disruption scenarios in your business. Always review risk scenarios and possible changes in the supply chain. This way, you, your employees and your business will always be prepared for whatever comes your way!
At Phoenix Systems, we are aware of the concerns our clients have with risk management in the supply chain. We hope that this is helpful and, if you have any other questions, please feel free to contact us at This email address is being protected from spambots. You need JavaScript enabled to view it..
