Strengthening your weak links
With the global marketplace resulting in far-reaching supply chains, any interruption in the route can have deeply damaging effects.
It is surprising to learn then, that only 11% of UK businesses currently have strong relationships with suppliers at all stages of their supply chain*.
Yet without having a deep understanding of who you are working with, how can you foresee and mitigate problems?
The research by CIPS (the Chartered Institute for Procurement & Supply) also highlighted that a staggering 66% of UK supply chain professionals said they lacked a risk mitigation strategy in the event of a supply chain crisis.
These two statistics alone are incredibly concerning and could have very serious consequences. The good news is that both issues are easy to remedy.
Where relationships are concerned, it’s a simple case of opening proactive, dedicated channels of communication, using technology to ensure transparency.
You should also consider introducing a Supplier Code of Conduct to ensure all links uphold the same standards.
And remember that the relationship is twoway – they could assist in developing risk mitigation plans as they will have greater knowledge of their own risks.
Indeed, the CIPS research showed that those with close supplier relationships up to tier three and beyond were 1.5 times more likely to have avoided a major supply chain crisis in the past 12 months.
This kind of knowledge and control is clearly invaluable, especially in the ever challenging and competitive economic landscape: it enables efficiencies and avoidance of disruption.
Risk mitigation strategies are something that you can develop in-house, once you have knowledge of your existing insurance cover and comprehensive data for your supply chain.
This can vary from understanding different types of risk such as geographical, material, political, environmental and so on, all feeding into a risk register. Once you know the risks, you can put mitigation plans into place.
If you don’t have the expertise in-house, or just feel you would benefit from an expert’s view, our in-house team of Risk Management professionals would be only too happy to help with an independent audit – it’s all part of the Griffiths & Armour service.
*CIPS, May 2015