6 Steps To Supply Chain Risk Management Success
Lean production may traditionally be considered the linchpin that holds successful supply chain management together, but reducing your exposure to risks is becoming a key priority for maritime companies.
Our dependence on, and partnerships with suppliers, whether it be via outsourcing or mitigating stock opens up a whole world of exposure for marine businesses and their procurement teams. That’s why risk management is so crucial to the supply chain.
Navigating risks really is the key to management success. With the global expansion of supply chains comes ever more complicated business structures and so countless issues can arise causing disruption, delays and ultimately money going down the drain.
Both buyers and suppliers can be hit by a number of unavoidable problems. From natural disasters to terrorism or cyber attacks. Each problem can have big effects on both upstream and downstream partners.
So what can you do to mitigate risk?
The best way to reduce exposure is to make sure you and your company keep up to date with developments in the maritime sector. And to follow a few key steps…
1. Choose your suppliers carefully
Conduct audits of your suppliers on a regular basis and if necessary, inspections to make sure they are committed to risk management like you are.
2. Authenticate suppliers’ insurance cover
It’s worth remembering that a certificate of insurance is only evidence of the insurance cover as it was when it was written.
3. Clearly define contract scopes and draft contracts
Be careful when defining contract scopes and draft contracts.
4. Understand the extent of your exposure
How much risk are you and your business exposed to?
5. Put a plan in place
Identifying risks is the easy part, now you have to get an action plan in place.
6. Lower the threat of risk by purchasing the right cover
Making sure your policy covers your company’s specific exposure mix and risk tolerance is important.
Do you have any ideas to add regarding risk management in supply chain? Share your opinions in the comment box or send us a message for discussion.
