All businesses face risks, and your business is only as strong as the weakest link. A failure on the part of any supplier or other supply chain partner could result in cascading problems across your business, and supply chain. However, today’s supply chain technology can help manage vendor relationships, improve payment protocols, overcome geographic challenges, ensure continued success through information technology (IT) patches and provide the end-to-end visibility necessary to gain effective control over your supply chain risk management strategies. Let’s take a closer look at how supply chain technology aids in risk management.
The Supply Chain Trends to Know in 2020
1. Technology Enables Better Supplier Relationships, Improving Supply Chain Risk Management
Understanding your suppliers is key to effective supply chain risk management. Your organization should have a strong track record of documenting supplier relationships, including potential conflicts of interest, weaknesses and strengths. Furthermore, potential risks to the environment or your employees for certain supplier activities should also be documented, reports Deloitte. This will help your company determine how your supplier relationships affect your company through external and internal factors.
2. End-to-End Visibility through Supply Chain Technology Improves Accountability, Reducing Risk
Supply chain technology that enables end-to-end visibility also improves accountability and reduces risk throughout your supply chain. When your company can thoroughly see where everything goes and how it moves, your company can assess the potential risk to its operations. In addition, increased visibility through supply chain technology can help your company overcome risks relating to poor order accuracy, consumer upset and more.
3. Supply Chain Technology Allows for Fast, Data-Based Dispute Resolution
Problems will always arise, and supply chain technology helps your company use data to resolve disputes. This may include disputes between payment for goods ordered versus actually received from suppliers, by consumers and from other parts of your supply chain. Also, 29 percent of Deloitte respondents cited past experience with supply chain waste, fraud or abuse within the last year. These risks can be successfully mitigated by a strong digital “paper trail.”
4. More Information Reduces Risk in Sales Operations, Especially Among New Markets
The most robust risk management strategies are ineffective if your supply chain does not understand all of its potential risks, including risk in sales operations. According to John Verver of ACL, companies must identify and categorize all enterprise and functional risks when considering expanding operations into new and emerging markets, as well as technological considerations when creating multiple distribution centers. Automated monitoring of activities and assets in sales operations will help companies develop comprehensive controls, automate data collection and analysis and improve success.
5. Modeling Technology Helps Companies Understand Risk Exposure, Planning Strategies and Scenario Analysis
As explained by Edwin Lopez of SupplyChainDive, supply chain risk management must go back to understanding the types of risks, including cyber risks, financial risk, labor risks, risk from natural disaster and politics. Furthermore, your supply chain risk management strategy must leverage scenario analysis to determine which these risks will come to fruition, which can be used to help reduce the chances of occurrence.
Boost Your Supply Chain Risk Management Strategy With Supply Chain Technology Today
Risk within supply chains seems to be growing daily, and the recent Equifax hack highlights how costly a failure in any part of your system can be. While your customers may be willing to forgive you for a delayed shipment, if their data is compromised, you might as well close up shop. However, today’s supply chain technology can provide the boost to your supply chain risk management strategy necessary to overcome the financial, (IT), geographic, political and other risks inherent in your company. So, what will you tell your customers when they ask, “Why haven’t you upgraded your systems yet, and how could you let this happen?”