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  • Kathrine Western and Shirley Lewington

Risk in the Supply Chain – 5 tips to manage

Shortages, lengthy waits, a sense of impending doom – who would have thought this would be our world just 2 years ago? Yet here we are in 2021, facing supply chain challenges in most sectors, vying for our suppliers’ attention along with all their other customers, seeking a swift response and their reassurance that “it will be with you Monday!” Where to start?

Tip 1 – implement a supplier management strategy; identify critical products and services where changing circumstances might seriously impact business performance.

· Are we the customer of choice?

· Did they think of us first when deciding how to allocate scarce resources?

When we create positive, professional relationships with suppliers, a key benefit is that when times are tough there is every chance they will speak to us first.

Tip 2 – critically appraise your supply chain management skills; we must understand the origin of all products or services used in our process

· Do we know where the pinch points are?

· How will we identify sectors under pressure or where resources are scarce?

· What are we doing to ensure our supply chains are sustainable and ethical?

When we understand our supply chain and the parties involved, we can set up audit processes that focus on capacity and assess the impact when crises occur.

Tip 3create effective communication processes that compel stakeholders to advise of changes in demand and suppliers to advise proactively of their ability to meet requirements.

· Has it been easy to find out whether our orders will arrive?

· Are the staff and skills in place to deliver our services?

· What challenges are the suppliers facing and how are they dealing with them?

Being well-informed about your demand and supply chain capability is something we promote in our work with clients and are often told: 'We do that well!' Make sure this is true. Get close to your stakeholders and your suppliers, build relationships that support open communication and keep the dialogue flowing!

Tip 4 – introduce processes and systems – digitisation of the information creates real -time data to enable swift, well-informed decision making.

· Does current data reflect what’s happening throughout the supply chain?

· Can you see which suppliers are experiencing difficulties or creating shortages?

· How do you use this insight to improve response times?

Supply chain visibility goes hand in hand with resilience and much of that visibility is down to investing in supply chain management tools and procedures. By creating a holistic view, and sharing data throughout the supply chain, we will achieve efficiencies and better outcomes.

Tip 5 – establish a risk assessment process that is owned by the business and reviewed at least monthly. Incorporate tools such as our ECOLIFT to ensure a 360-degree perspective.

· Did we see this coming?

· How effective is our risk assessment process in anticipating crises?

· Have we put plans in place to mitigate and manage the risks?

Too many organisations do this as a one-off exercise and then quickly move on to more exciting activities only to rue the day when the inevitable happens.

As ever in life, it’s the unexpected that trips us up – the snowstorm that takes the power cables out, the container on a ship in the Suez Canal stuck behind the Ever Given or the travel chaos caused by monsoons, hurricanes and volcanoes erupting.

The pandemic was not unexpected. Brexit was not unexpected. They just weren’t planned for.

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