Questions to Ask Yourself to Minimize Supply Chain Risk
Proper management of supply chains is important to businesses of all sizes – large and small. At HVTDC, we understand that it helps pave the way for manufacturers to operate and compete in today’s economy, fostering innovation and growth within the Hudson Valley and New York State. That is why we have worked to educate our readers each month by featuring enlightening articles and case studies analyzing the ins and outs of supply chain management.
This time, however, we wish to take a different approach. Rather than providing you with the answers, we will present you with a set of questions to stoke the mental fire burning within your organization’s supply chain management system.
The first question to ask yourself is: are you satisfied? Are any of your suppliers costing you more than you think they should? Do you perceive any of them to be at or near capacity? Have they been late with deliveries or below standard in quality? Hopefully, you answered no to each of these questions. Nonetheless, there is likely to be ample room for improvement.
For instance, do you have single-source suppliers for any items used in your processes? Do you have a backup plan in the event your primary supplier goes down? If so, has that backup plan been tested? An effective way to reduce the impact of errors or delays is by partnering with multiple suppliers. You can never be 100% certain that your regular vendor will be able to provide the necessary services in a timely fashion each and every time. If one supplier can’t deliver, your business will still be able to meet consumers’ needs if you have a dependable relationship with the secondary supplier. Conversely, in the event that a much happier “problem” arise as demand for your product increases, are you confident your supplier can meet the heightened demands?
Once you have identified suppliers, how do you qualify them? Do you know where they source their materials, and what kind of quality assurances have they afforded you? Do you have supplier performance management and development programs formally in place? Are quality standards built into your supply chain, or does inspection occur after it’s already too late? Have you developed a built-in process, constantly reviewing all performance metrics with regard to your supply chain? Do you have a permanent eye toward improvement in all functions? More specifically, have you developed manufacturing instructions and bills of materials? Do you manage the scheduling of lead times and component ordering? Have you developed a database of components and suppliers? For practically any product, there is much more involved in quality control than just the number of suppliers.
Finally, have you examined the operational efficiency on your end? Ask yourself this: are the procedures and systems in place for the movement of information and money as crucial to you as the movement of materials? Have you ever looked closely enough to ensure that it does not take longer for you to manage paperwork and process payments than it does for your supplier to deliver the actual product? You might not realize that the solutions to your supply chain issues dwell right within your own doors. Your organization may be in need of implementing a Lean-management method such as Value Stream Mapping (VSM) to assess the management and information systems that support your basic processes.
Ultimately, managing your supply chain is about being proactive rather than reactive – preparing your business to respond to any given situation. It should not take a disastrous collapse in your supply chain for you to examine your management system with a fresh perspective. For any help answering these questions or to learn about HVTDC’s Supplier Scouting Initiative, contact our Supply Chain Team:
John MacEnroe, 845-391-8214 ext. 3004, firstname.lastname@example.org