5 Key Strategies for Managing Your Supply Chain Risks

Even without adding in 3 years of Covid, the war in Ukraine and the NZ weather events ensuring your supply chain should be one of your key focusses for 2023. 

So how do you improve your resilience to these volatile conditions and stay afloat. 

Your ultimate Goals for managing your supply chain are:

1.        EFFICIENCY    Ensure all parts of your supply chain are running efficiently

2.        OPTIMISE       Ensure your logistics are optimised and standardise wherever possible

3.        QUALITY         Constantly focus on improving quality

4.        FLEXIBILITY    Look at ways you can improve flexibility in all your processes

5.        FINANCIAL     You are a business – you are there to make a profit so make sure you monitor the supply chain to ensure it operates cost effectively and supports your financial success.

One small incident can see a domino effect to destabilize your supply chain. The fall out if you do not have sufficient oversight can mean your company suffering potential delayed deliveries, damaged products, a tarnished reputation, and other operational and financial consequences.

You need to know your own data.

• Identify your vulnerabilities (security risks) to your supply chain – both physical and data and recognise where they could be introduced or exploited. 
• Review your exposure to volatile market pricing and build protective mechanisms into your supply chains to cover the shortages and rising logistic costs.

To do this you need to map out your entire supply chain covering the sourcing of your product or its components, the shipping, where you will make and store your product and the Delivery to your end consumers.

For each of these four areas you will need to identify your areas where you have exposure to supply and inflation risks. At what points could you be open to theft or sabotage and how do you protect yourself from this?

In addition to the steps outlined above, there are five key strategies that businesses can implement to manage their supply chain risks:

1. Diversify your supplier base: Relying on a single supplier for your raw materials or components can be risky, especially if that supplier is located in a volatile region or experiences disruptions. Consider working with multiple suppliers to ensure that you have a backup in case one supplier is unable to deliver.
2. Build strong relationships with suppliers: Developing strong relationships with your suppliers can help to mitigate risks by ensuring that you have open communication channels and can work collaboratively to address any issues that arise. 
3. Develop a contingency plan: Create a contingency plan that outlines the steps you will take in the event of a supply chain disruption. This could include identifying alternative suppliers, developing backup transportation options, or increasing your inventory levels.
4. Invest in technology: Technology can help to improve visibility and transparency throughout your supply chain, making it easier to identify potential risks and address them proactively. Consider implementing supply chain management software or other technology solutions that can help you monitor your supply chain in real time.
5. Conduct regular risk assessments: Regularly assessing your supply chain for potential risks can help you stay ahead of any potential disruptions. Identify potential risks, evaluate their likelihood, and impact, and develop strategies to mitigate them.

By implementing these strategies, businesses can help to ensure that their supply chain is resilient and can withstand the challenges of today's dynamic and ever-changing business environment.

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