3 Ways to Better Manage Supply Chain Risk in 2019
Managing a supply chain in 2019 incurs a certain amount of risk by necessity, but having a plan in place to manage risks, respond to incidents, and deal with disruptions can put your business ahead of competitors.
In order to best address these supply chain risks, they can be categorized by implications, or by sources.
- Qualitative: addresses the reliability and accuracy of materials
- Quantitative: addresses the availability of material or overstocks
- Atomistic: impacts only constrained links within it
- Holistic: requires businesses to assess entire supply chains
Based on a joint report from Cranfield School of Management and Dun & Bradstreet, supply chain risks can also be categorized in the following segments:
- Supplier criticality
- Supplier financial risk
- Global sourcing risk
- Foreign exchange risk
By looking at each of these risk categories individually, businesses gain a deeper understanding of how to best prioritize their attention. Supply chain risk management trends for 2019 offer further insight and solutions to businesses who desire a more transparent, risk-aware supply chain.
Keep Tabs on Your Current Suppliers
Visibility and transparency throughout the supply chain are critical as consumer priorities shift toward socially and environmentally-conscious ethics.
Outstanding performers are 250% more likely to have a fully visible and transparent procurement system compared to their peers, according to Deloitte’s Global CPO Survey of 2018. Despite this, 65% of procurement leaders have little or no visibility in their supply chains, according to the Zycus whitepaper “Ensuring Efficient Supplier Risk Management with Supply Chain Transparency.”
Pick Your Battles with Suppliers
Arguments with suppliers can cause major disruptions to production. While disputes are bound to happen, minimizing risks by hiring effective communicators who can arrive at symbiotic compromises will go a long way toward your company’s bottom line as well as maintaining fruitful supplier relations.
It’s also important to pick your battles with suppliers; ultimately if there is a continued conflict with a supplier, it may be time to find a new one.
Utilize Technology To Its Fullest
Modern technology can make a big impact in supply chain risk management if used correctly. 2019 trends include artificial intelligence, the Internet of Things (IoT), and blockchain as helpful resources to supplement your supply chain management.
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