Even if all goes according to plan, there’s no way to predict the natural and geopolitical factors that can cause severe logistical setbacks. In 2016 alone, natural disasters cost the industry $211 billion.
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How Can Supply Chain Managers Assess and Manage Risk in 2019 Featured
Supply chain management is a complicated process owing to the simple fact that its variables outweigh its constants at every stage. Success at each of the many stages is crucial. However, with so many factors at play, it’s most likely that something will go wrong.
However, this doesn’t mean there is no way around it. The losses can be minimized, and the risks can be managed better, if not controlled entirely. Here are some ways a supply chain manager can assess and manage risks associated in 2019.
Keep an Eye On Things
As a supply chain manager, it is important that you have an eye on the entire process. This clear visibility is especially important due to the fact that there are always multiple factors in play at any given time. Maintaining a system that encourages clear two-way communication plays a crucial role in this.
Timely feedback from stakeholders at every stage will allow you a clear understanding of the status of your shipment at any particular moment. Clear communication channels also help identify logistical obstacles, enabling you to take remedial measures before the situation evolves into a crisis.
Have a Back-up Plan
The main goal of supply chain management is ensuring that all operations are effectively equipped to carry on uninterrupted.
Unfortunately, this is not always possible.
For example, if working on a single supply line, it’d be important to have a diversified system where your supplies are sourced from multiple outlets instead. This will allow the production process to remain operational at all times, even if one of the supply lines is compromised.
Similarly, it is important to have alternate arrangements planned in case something goes wrong. You must have a comprehensive “What If Analysis” in place that pushes you towards creating Plan-B measures. These may include maintaining communication channels with secondary and tertiary suppliers, increasing re-order limits and buffer stocks, and even pre-planning alternate shipment routes.
Keep It Simple & Fluid
It is extremely crucial that your entire supply chain management process is simple and fluid. This means exploring the options available in logistics technology.
Mobile apps, like EasyStock and Mobile-SCM, are designed to allow users to track the entire shipment process. These apps can also complete other tasks like relaying shipment details from one stakeholder to another in real time, something previously an SCM manager would perform.
Similarly, it is important that you also keep the entire process as fluid as possible.
In 2018, the Peak Pegasus had to wait for a month to dock and unload its $20 million soybean shipment, after China introduced new tariffs on US goods. In order to avoid a similar supply chain disaster and the chaos that ensued, your system should be flexible enough to accommodate an alternate supply of Soybeans from India or Brazil.
A back-up in place would make you, and your operation, more adaptive to change.
Be Prudent, Proactive, and Aware
Information is important in the field of supply chain management. The biggest advantage of operating in the year 2019 is that there is no shortage of data. From most natural calamities to the geo-strategic ones, there are predictions, forecasts, and reports on almost everything.
Keep an eye out on everything important and relevant – global affairs, industry news, and global geostrategic changes. The more informed you are, the better informed your decisions will be. This will significantly help you reduce risks and, at the very least, allow you to prepare for any changes that might impact your shipments.
The right mindset and fool-proof strategies can help significantly reduce the risks involved in even the most volatile processes. Combined with effective supervision and increased automation, there’s no reason your logistics and operations should underperform.Last modified on Monday, 11 February 2019
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