Supply Chain Risk Management
Managing the risk to a business’ supply chain is a complex and constant challenge, particularly for those with long and international chains.
The process of identifying those risks, the likelihood of them happening, their severity and then taking strategic actions to take control of them, is supply chain risk management.
It forms part of the wider process of supply chain management, which covers the complete production flow of a business.
How important is supply chain risk management?
Managing risks within any business has always been important, including the impact of supply chain disruptions.
However, in recent years there has been an increase in prevalence of issues that cause problems with supply chains.
Brexit, Covid and the war in Ukraine have all had huge impacts on most supply chains, and the fallout from each one is likely to simultaneously continue for many years, creating even more complex supply chains as solutions to issues are continually found.
This elevates the role supply chain risk management has in almost every business, and therefore the resources that need to be applied to oversee it.
Why are supply chains becoming more complex?
Unfortunately, our world has become unpredictable by nature, from natural disasters and global warming to wars and even a global pandemic.
As businesses continually outsource many processes and functions to external suppliers, supply chain networks are growing in complexity and becoming far more challenging to manage.
Consequently, risk management has never been more important and those businesses that under-resource the risk assessment of supply chains, will sooner or later hit big problems.
How can a business competently look at supply chain risk management?
At the forefront of crises affecting supply chain efficiency is a lack of visibility and processes in order to identify these risks and act quickly to put out their fires.
Supply chain risks can affect companies in many different ways, whether that is bringing an entire process or logistics to a halt, or the recall of products or financial difficulties, all of which can have a domino effect on clients and suppliers alike.
Therefore, businesses increasingly need technology to support the process of identifying risks, understanding the likelihood of them happening and knowing what impact they could have on the organisation.
Thankfully there are risk management support tools available that provide support to businesses to automatically carry out ongoing supply chain risk management checks, and then help take strategic actions to deal with any issues.
The tools remove the need for people to invest time in carrying out potentially thousands of checks a year, and provide reassurance to businesses and their supply chains that any risks are lowered.
What are the benefits of investing in risk management tools?
- Reduce end to end operational impact from supply chain disruptions
- Reduce likelihood of financial implications
- Faster recovery from disruptions
- Optimal functionality of supply chain processes
- Creating a more agile business
- Better visibility and data analytics
The technology behind supply chain risk management tool Calathea, provides a high-definition, real-time view of a business’ supply chain, highlighting key areas of risk and allowing the organisation to create bespoke action plans to mitigate these.
Data driven insights provided by Calathea are easy to understand and act upon, with no need for specialist resource in this area.
With the ability to make effective supply chain decisions, have clear visibility of the development actions required of a supply chain and manage the delivery of these, Calathea is a resource that businesses around the UK, and indeed globally, will increasingly come to rely on, to ensure they navigate to calmer waters of a trouble-free supply chain.
