- May 25, 2020
Reducing Risk in Supply Chain
Managing a large and complex supply chain may be daunting, especially with many unforeseen challenges that you have to deal with on a day to day basis. With more systems, technologies, and business partners, there is no doubt that uncertainty will occur and large retailers need measures in place to deal with these disruptions. It doesn’t matter what kind of problems you are dealing with, whether it is the pandemic, shifting trade policy, economic depressions, or natural disasters.
Retailers, now more than ever, are strategizing on universal ways to strengthen their supply chain management and prepare them for the future. From making their supply chains more secure, diversified supplier portfolios, all the way through, developing stronger supplier relationships. Retailers are starting make sure they are being proactive by implementing technologies and strategies to gain insights and visibility of the industry landscape.
Diversify Supplier Portfolios
It is easy to become reliant on a few trustworthy suppliers for most of your products, but it may increase risks in your supply chain when some of them become undependable. In the case of economic instability, cyberattacks, political unrest or natural disasters, a supplier may not be able to fulfill your demand which may cause a huge disruption in your fulfillment if you cannot find any replacement. Besides large suppliers, using local SMEs (small and medium enterprises) will offer you efficiency by speeding up the supply process. Having a larger pool of suppliers to choose from also helps you lower expenses on buying up to 20% and get better quality products through competitions between suppliers.
Build Strong Relationship with Suppliers
To reduce risk within the supply chain – regularly check up with your current suppliers to ensure they are still complied with your organizations’ requirements. Rather than feeling comfortable with your existing pool of suppliers, keep an eye out for quality suppliers that may meet your projected demand or help you grow as your business scales. Very often retailers and suppliers have very goal-oriented relationships that’s strictly business and conversations are very limited. But it is important to treat your suppliers as collaborators, work together to streamline the supply chain process and improve product quality. You will also be alerted of any disruptions in the supply chain if you keep close contact with your suppliers.
Be Proactive to Changes
Up-to-date information is the key to reducing risks as it helps you identify potential problems and react to them as soon as possible. Besides checking on suppliers regularly, employ technology to analyze the health of suppliers from external sources such as global news. Keep up with changing factors in the environment including cyber-attacks, natural disasters, political unrest as each of these may have an indirect impact on your supply chain even if they don’t happen near you. Having safety measures in place for any of these events will allow you to mitigate these risks when they occur. Finally, maintaining new level visibility of your supply chain will help you identify problems and come up with solutions in a timely fashion. By doing so, retailers can protect their business while providing high quality products and services to customers, which benefit them in future transactions.
How does CBX Help?
CBX has an automated compliance verification process for on-boarding suppliers with your organization. We make sure each supplier is compliant with your standards before they can start working with you. We also notify you when a factory’s compliance is expiring in order for you to keep you suppliers up-to-date.
CBX Cloud’s supplier portal is where suppliers can access the same system as the retailers for real-time information exchange and work through the sourcing process together. It makes collaboration more efficient and as a result, leads to better products, lower costs, and more profits.
With our Supply Chain Management Software, retailers and suppliers gain visibility to the sourcing process from order to delivery, making sure that each step in the process is going as planned, and if not, offering flexibility to make changes on the fly. For more information please visit www.cbxsoftware.com
Contact CBX Software today and learn more about how a good SCM system can help you reduce risk in your supply chain.
Written by Stephanie Chan, May 22, 2020