Anticipating risk in the supply chain and creating suitable countermeasures are vital practices to keep your warehouses and distribution centers operating at peak efficiency. Supply chain risk management processes should be areas of focus, with codified policies personnel can turn to and everyday practices that will minimize the damage from numerous causes, as well as enhancing everyday safety and equipment uptime.
Today’s logistics leaders know that disruption can come from nearly any source, internal or external. From a natural disaster destroying transportation infrastructure to a key supplier going out of business, there are plenty of external factors presenting supply chain risk. Internal dangers include the possibility of an equipment breakdown or disruption caused by an industrial accident. You should be ready to react to trouble, whatever form it takes, to keep your supply chain moving and your partner organizations happy. Miner can provide proactive service to minimize these risks, providing a safe, efficient and sanitary work environment.
What is supply chain risk management?
The actual definition of supply chain risk management is very straightforward. According to TechTarget, every effort made to monitor and counteract threats to the supply chain falls under the umbrella of supply chain risk management. Creating lists of potential risk factors and developing countermeasures are important early steps. From there, it’s time to test the processes to make sure they have the intended impact and implement them in practice.
TechTarget added that departments outside of logistics may be involved with the creation of risk management strategies. The procurement team, marketing department, finance personnel and more have a stake in the outcomes of risk prevention and the measures needed to reach those goals. Therefore, it’s natural to have open lines of communication with leaders in each of those departments.
What are the best practices of supply chain risk management?
The importance of risk management in supply chain management comes from the costs that can quickly accumulate when there is a disruption. No matter the cause, a breakdown can bring operations to a halt, with work building up in your warehouses and distribution centers and value creation ceasing. Unless you have a maintenance policy in place to proactively detect problems and prevent downtime, these issues can occur without warning.
To prevent such a situation from occurring within your business, you should consider the following practices. Whether you’re embracing formalized risk management for the first time or are revising your policies in the wake of massive disruptive events such as the novel coronavirus pandemic, it pays to have such reliable practices in mind.
Actively calculate the risks of your initiatives
Every new business decision can bring in a different risk profile and increase the danger of disruption. According to Deloitte, it pays to roll a supply chain risk assessment into such plans. For instance, if you’re expanding your geographic reach with a facility in a new territory, you should be working with internal stakeholders to determine the new potential disruptions that come with stretching supply lines across international borders, creating countermeasures and redundancies you can fall back on.
Build overall resilience for unknown risks
While assessing the known risks of new ventures and everyday processes alike will protect your organization from several kinds of disruption, there are always unknown dangers lurking. McKinsey & Company suggested that when you enact overall strong and resilient processes such as comprehensive employee training and ironclad contracts with your suppliers, it’s possible to blunt the impact of unknown dangers, even if by their very nature you cannot predict them. You don’t know when or where these problems will strike, but you can bounce back quickly.
Defend your key infrastructure against breakdowns
Becoming proactive about maintenance is a key practice for risk management in logistics and the supply chain. When your strategy regarding asset upkeep is purely reactive, waiting for equipment to fail, you are practically guaranteed to experience disruptions that would otherwise be preventable. An industrial door failure can stop goods entering or leaving a facility, bringing the whole supply chain to a halt. A breakdown that harms personnel is even worse, in terms of both human suffering and the damage to your bottom line and reputation that will follow. Embracing proactive maintenance, such as the service provided by Miner’s service professionals, is therefore a risk mitigation must.
Stay in compliance with all regulations
Maintaining your assets isn’t just a way to prevent the devastating consequences that come with failures. This level of focus is important for keeping your facility in compliance with regulations such as fire codes and Occupational Safety and Health Administration rules. The fines and corrective actions that can follow in the wake of a failed inspection represent their own kind of supply chain disruption. Keeping your warehouses, distribution centers and other buildings up to code helps in two ways at once, making safety incidents less likely and keeping regulatory action from slowing your operations.
Ready to Improve Your Supply Chain Risk Management?
If your organization is displaying major risk factors for supply chain disruption – for instance, if leaders are not tracking potential problems, or if there is no formalized maintenance strategy – it’s time to correct the issue at once. Managing this risk is a fundamental part of keeping the supply chain moving and the lights on, and the associated practices required have such a clear upside that there’s no bad time to implement them. With Miner service professionals providing performance and safety tracking alongside proactive maintenance, you’ll be more aware of potential issues, mitigating them before they cause damage.
Reach out to Miner today to see how certified service professionals can counteract risk factors in your facilities – request a quote now.