Historically, businesses structure was very simple and it was easy to visualize the entire supply chain. In today’s evolving complex business structure there are vulnerabilities that companies face within their supply chain. Business has become so complex that is it impossible to protect itself against all of the potential risks. Therefore, it is in the best interest for all businesses nowadays to understand their supply chain risks and what can be done to prevent or prepare for the potential risk. Below are 5 supply chain elements that businesses nowadays need to be aware of to mitigate risks.
- Knowing all of the inputs and players in the supply chain. Having an understanding of whom and what is going on in the supply chain is essential to gain a strong visibility that can help observe high-risk activities and events. Not knowing this information will result in poor visibility and become impossible to plan against risk.
- Identify potential failure points along the supply chain. Doing the research and analyzing where there is a high likelihood that the supply chain will fail, will help understand where a company is most vulnerable.
- Be proactive against known and unknown supply chain risks. Once the risks are assessed they should be prioritized on how critical they are to business elements. It is important to correct those risks or formulate plans to mitigate the supply chain if the risk occurs. The risks should be correct or planned for according to importance of the supply chain.
- Share information carefully. It is important to share information with suppliers as well as customers. This information should be shared from all parties involved. However, this information should be written out and agreed on before as to what will be shared.
- Perform continuous review. All aspects of business should be constantly reviewed to make sure that all formal business compliances are being met. Also, that there are not other issues that are being created with new processes that can be detrimental to the business.