"When will the COVID-19 pandemic finally end?" Many business owners are asking themselves that question. Unfortunately, the answer is not yet clear, and business owners must remain vigilant to the threats to their industry. For many, this means managing the internal and external risks is a top priority.
Supply chain risks occur when the raw materials your business relies on are not delivered on time or at all. These risks fall into three main categories:
End-to-end supply chain risk management is the process of strategically identifying, assessing and mitigating the risks in a supply chain. Here are some of the key components end-to-end management relies on:
Cybersecurity. Reliance on the cloud, artificial intelligence and the internet of things leaves businesses vulnerable to cybersecurity threats, including malware, ransomware, phishing and hacking. Businesses can reduce their exposure to these risks by implementing strong internal and external controls such as these:
Supply chain resiliency. The COVID-19 pandemic did not cause vulnerabilities in the supply chain, but it exposed them. As a result, business leaders are recognizing the need for built-in resiliency and agility through tactics such as multi-sourcing and nearshoring. Other tactics include adjusting inventory for peak sales periods such as Christmas as well as for potential seasonal disruptions due to weather.
Technology. Invest in the right technology. Using one software for the same or similar functions throughout the company maximizes efficiency and provides an added layer of resilience. By assessing how the company is using its software, supply chain managers can work toward the goal of keeping all of the company's data in one centralized repository.
Testing. Periodically stress test the entire supply chain network. This allows you to uncover potential vulnerabilities before they cause any problems.
Disaster recovery and business continuity. Work across the supply chain to put a disaster recovery plan in place to help ensure business continuity in the event of a supply chain disruption.
Communication. As with most business functions, good communication is key. Have a communication plan in place the allows the company to alert its customers to delays in a timely manner.
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