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Take the supply chain pressure test

Supply chains are becoming increasingly complex, with dependencies upstream, in-plant and downstream. Which links in your supply chain might be most at risk? And what can be done to help manage it? Take our four-part questionnaire to help you uncover and avert potential risks in your supply chain before they emerge. Take the Supply Chain Pressure Test!

How did you do? Are there weak links in your supply chain? Managing risk in the supply chain can be daunting. Counterfeit parts are more common than you might think. Delivery delays happen all the time. Language and legal differences may elevate risk when imported goods and services are used. It might not be enough to know your company takes the necessary precautions to control inventory. It is important to consider whether your suppliers, and their suppliers, do too. Here is some recommendations for helping you control risk in your supply chain.

Know as much as you can about who and where your parts, products and services come from – particularly if your company relies on overseas suppliers. Assess the practices, standards and readiness for business disruption of critical suppliers as part of strategic and business continuity planning, including:

Regulatory oversight

Just because you follow the rules doesn’t mean your suppliers do. All parts and labor conditions may be subject to U.S. regulations for your industry, even if they are imported or outsourced. Constant oversight of suppliers’ policies and practices can help ensure compliance with safety, environmental and industry regulations.

Counterfeit parts

Counterfeiting is big business. According to Electronics Weekly, the current estimate is that at least two percent of electronic components worldwide are counterfeit¹. Knowing how to identify counterfeit parts is helpful. Rigorous planning and oversight of vendor selection criteria, engineering controls, component sampling, inspection and testing is key, too.

Overseas suppliers

CNN reports that the International Chamber of Commerce expects the value of counterfeit goods to exceed $1.7 trillion globally by 2015.² Also, a domestic supplier does not always equal a domestic product. When parts, components or suppliers come from overseas, consider the risks and liabilities specific to using foreign goods and services.

Consumer demand

Market expectations extend to every point in your company’s supply chain. If your customers have specific demands, like earth-friendly products, fair-trade labor practices or clean technology, it is important that your suppliers adhere to practices in line with these expectations. Where, how and by whom your parts and services are supplied may matter.

Have a backup plan

The origin of the materials, products and services your company relies on may not be static. Every time you change suppliers, consider re-evaluating and re-ensuring that the proper regulatory, environmental, safety and backup standards and controls are in place and practiced.

Supply chain management best practices checklist includes, but is not limited to:

  • Know regulations and standards; consult with legal counsel
  • Know your suppliers, their suppliers and their suppliers
  • Require a review and approval process for any changes at the supplier (or their suppliers)
  • Conduct a rigorous quality control program
  • Arrange for independent product testing
  • Transfer risk and confirm supplier insurance coverage as appropriate; consult with legal counsel and insurance agents
  • Have a backup plan
  • Document everything!

1 Source: http://www.electronicsweekly.com/news/business/distribution/2013-its-time-to-tackle-fake-components-2012-12/
2 Source: CNN.com; http://money.cnn.com/2012/09/27/news/economy/counterfeit-goods/index.html

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