Are There Ghouls and Goblins in Your Supply Chain? 4 Steps to Exorcising Them
Happy Halloween! For many manufacturers and retailers, we are now in the make-or-break time of the year. The pipeline is full from beginning to end and while in many cases it is now too late to be proactive, it is never too late to learn for next year. Companies need to examine their supply chains from beginning to end for risks and vulnerabilities in each of the 6 core areas (detailed below), to keep these ghouls and goblins from impacting their customer service.
6 Core Supply Chain Areas
- These include quality, on-time shipping, order integrity, ship quantities and ship complete, compliance with instructions, financial integrity, and administrative issues.
- Consumer demand is fickle, thus Demand Variability for products and variants can be extreme and stress your pipeline or build your inventory.
- Changes in policies, procedures, and tariffs can dramatically affect your supply chain. They can affect the cost and speed of doing business, or even if you can do business. Businesses must remain alert to changes in the political and regulatory environment that may affect their ability to serve their customers. In addition, customs and border related delays can hold up merchandise for days or even months without notice.
Terrorist / Criminal
- Product counterfeiting and contamination remains a problem in international trade. Rigid vendor qualification and evaluation is a first step. Securing and monitoring cargo is critical to maintaining its integrity.
- Environmental issues can easily disrupt supply chains for extended periods of time. Weather needs to be constantly monitored throughout the supply chain process.
- Transportation risks range from slow-steaming to port congestion to worker strikes. Poor infrastructure in the shipping or receiving country can also create significant problems and lead to delays during carrier hand-offs or loss and damage en-route.
In our experience, careful planning and real-time information works much better than garlic and holy water to battle these supply chain demons. Be alert: your supply chain demons like to hide and come out when you least expect them. To combat them, experience and extensive supply chain knowledge come in to play. Deep knowledge of best practices with functional checklists and survey documents help identify the risk points in your product pipeline.
Four Steps to Exorcising Your Supply Chain Ghouls
The first step involves mapping your entire Supply Chain with their inputs, outputs, players, activities and risks.
- At each identified node, contingency and mitigation plans should be created for each identified risk. This involves knowing your suppliers, your carriers, your customers, your risks, and the rules of the game. A detailed examination of each of your vendors and carriers is critical. Are they CT-PAT compliant, ISO certified? Are their processes mature? Do they have backup and contingency plans? Do you need redundancy in your suppliers? Most of this can only be learned on site and through building close relationships with your supplier partners.
Next is to build your Supply Chain and contingency plans.
- Once these plans have been created with your suppliers and vendors, they need to be integrated into an enterprise plan or across your broader Supply Chain plan. This is a multi-departmental effort with Risk, Quality, Merchandising, Supply Chain and Logistics, Finance, Planning, and many more departments included. The plans should be implemented so that they may be executed immediately when needed.
It is not enough to have data on all of your shipments.
- Data is like dirt, it won’t grow a harvest until it is cultivated. The Supply Chain is data intensive and information poor. You only need to know what is currently going wrong or what may be going wrong. This means you receive only the information that is critical at any given time, yet have all information close at hand when requested. As Supply Chain data comes from many dissimilar and non-integrated sources, it’s not conducive to mining and reporting on the spot. Thus, building the data warehouse to support them is a primary duty for many businesses.
Monitoring the final report data becomes the crucial activity.
- As data is turned into information and it is made actionable, management needs a dashboard to be able to watch for all of the identified risks across the Supply Chain.
We welcome the opportunity to work with you to help streamline your supply chain and transportation operations. If you have any questions, call us today at (303) 746-2648!