Supply Chain Management Tips [Video]
Supply chain management is an important, but often overlooked, business consideration. Inventory disruptions affecting your company’s ability to deliver goods and services can significantly impact operations and finances.
A business may be held liable for every step in its 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:
Just because you follow the rules, it does not 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.
Counterfeiting is big business. According to Electronics Weekly, current estimates have at least two percent of electronics components worldwide to be counterfeits.¹ 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.
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.
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, you should ensure your suppliers adhere to practices in line with these expectations. Where, how and by whom your parts and services are supplied matters.
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, re-evaluate and re-ensure that the proper regulatory, environmental, safety and backup standards and controls are in place and practiced.
Change is Constant
The manufacturers, and their materials, products and services your company relies on are rarely static. Every time you change suppliers, re-evaluate and re-assure 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 to the extent possible; consult with insurance experts.
- Have a backup plan.
- Document everything!
More Prepare & Prevent
Your business may be held liable for every step in your supply chain. Get tips on effective supply chain management with this infographic.
The Travelers Supply Chain Pressure Test surveyed more than 4,000 manufacturers and found in-plant processes were the weakest links of the supply chain.