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4 Risks Every Supply Chain Management Professional Should Know

Michael Wilson | Dec 11, 2014

Supply chain management has several challenges for professionals in the field who want to do their work effectively. By understanding some of the top supply chain risks, it will ...

supply chain management

Supply chain management has several challenges for professionals in the field who want to do their work effectively. By understanding some of the top supply chain risks, it will be easier for you to overcome these obstacles so that they do not drastically affect your business. Here are four of the most common problems facing today’s supply chain professionals.

1. Failing to Receive Deliveries on Time

This is a risk that companies have to deal with for many different reasons: from late-arriving trucks to travel delays to miscalculated estimates, there are a number of reasons why deliveries may not reach their destination in time. This is a supply chain management risk that can affect the chain in a variety of ways, depending on whether it happens on a delivery for a customer or a delivery to another part of the supply chain. Whatever the case may be, if it is not addressed quickly and compensated for in other parts of the chain, it can cause serious problems for both production as well as client relationships.

2. Natural Disasters Disrupting Shipments

There are many cases when severe rain storms, tornadoes, floods, or other kinds of weather can temporarily slow or even shut down parts of your supply chain. A good example of this was back in 2012, when flooding in Thailand lead to a hard drive shortage. This is an example of a devastating supply chain disruption, as many major companies like Western Digital and Lenovo were affected by the flooding and the operations of some electronics companies were impacted for over an entire year.

These supply chain management risks can send supply chain professionals scrambling for a resolution, since they often happen quickly and are wide-reaching in impact. It can be tough to come up with a plan to resolve this issue, but business managers need to do what they can to replace or relocate the parts of the supply chain that were hit the hardest.

3. Compliance or Contractual Breaches from Supply Partners

This is a serious problem with supply chain management that is difficult namely because it is so hard to control. When turmoil occurs in a company that is out of your direct sphere of influence, there is little that you can do on your end except create internal policies that help limit the damage. By letting the offending party know about the breach and replacing them in the supply chain if necessary, you can help remedy these types of supply chain issues.

4. Failure of Digital Supply Chain Systems

A huge part of modern supply chains today, including tracking and inventory tools, rely on computers and computer networks. While this reliance can lead to more efficient operating methods in several regards, it also means that supply chains are vulnerable to issues that come about as a result of these computer systems shutting down. Whether this shutdown comes from a simple user mistake or a malicious exploit that is introduced into your system, it is important that you are able to correct these issues as quickly as possible and get the supply chain system back up and running. If necessary, your organization may need to rely on backup systems while you are trying to get your digital systems back up and operational.

These are some of the more common supply chain risks, but they are not the only ones. A well-rounded supply chain manager is someone who understands many of the common risks involved in this field and has already set their company up to respond to a large majority of them. For assistance managing your own company’s supply chain needs, it is also important that you depend on the right professional partners for help in this area.

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