Many factors—weather, political or military disruption and labour/logistical issues—can affect supply delivery schedules. Suppliers should be constantly evaluated, and back-up suppliers should be available.
Can You See Into Your Supply Chain?
Your supply chain management solution should provide you with visibility into your supply chain. Certain conditions should trigger warnings, selection of alternate suppliers and back-up vendors for everything you purchase.
Dependency on a sole source is dangerous and usually ends up being expensive. Nothing encourages price increases like the perception that you have no other alternative suppliers. Incorporating multiple suppliers where possible can offer the opposite pressure on prices. Knowing that there is competition can incent your supplier to think twice before jacking up prices.
Today’s ERP systems offer robust data maintenance and reporting capabilities in this area. The risk of supply interruption, in many cases, can be reduced to a very low order.
Embrace Risk; Reap the Rewards
While risk is always present in the marketplace—and avoidance of risk can still be a useful strategy—the ability to embrace risk and manage risk is a strategic strength for businesses, in general, and advanced manufacturers, especially.
Technology is Key to Avoiding Supply Chain Disrpution and Volatility
Technology, including CPQ (configure-price-quote) software, is key to giving you the edge in betting for or against in the ongoing risk/reward wager that confronts all businesses on a daily basis.
How many of your suppliers are located in Tornado Alley? How many in politically unstable countries that see coups and revolution as a national sport?
Today companies are more than likely working with suppliers located almost anywhere on the planet. If these suppliers are critical to your production process, there is considerable exposure for companies that fail to plan for supply interruptions.