In the joined up global economy, it's sometimes said that "When America sneezes, Britain catches a cold". And so it is with your own supply chain.
Your business health can be brought down by a weak link which is why it's important to take the pulse of your supply base and ensure it is in good health.
Here's 10 possible warning signs that you need to run your own supply chain assessment:
1. You don't have perfect 20:20 vision of your suppliers, contractors and service providers
Supply chain blind spots are a common symptom of sickly supply chains. Ask yourself: Do you have full visibility of your supply chain? Are you able to plot trends and spot weaknesses by mapping the full historical data? Do you have sub-contractors in your sights?
2. You have data overload
Have the simple spreadsheets you set up years ago grown enormous and complex? Do these spreadsheets align with your other back office systems? Can you use the information collaboratively. How easy is it to turn the information into useful management reports and instantly retrieve requested data?
If you are relying on manual processes to manage a large supply chain, chances are that you will be drowning in data.
3. You're taking no chances and audit everyone
There’s no doubt that seeing something with your own eyes gives you an extra degree of confidence, but it's expensive and often ineffective. The frequently audited supplier can becoming proficient at passing audits.
Audits can be a very powerful tool if used sparingly and positively, but when overdone they become a drain on both supplier and client.
4. Your cyber defence strategy is still on the to-do list
One of the newest threats to your supply chain is going to get bigger and more sinister in years to come. Failing to ensure that your suppliers are cyber-compliant can leave your business open to catastrophic breaches of data and large associated fines.
Make sure a comprehensive cyber defence strategy is in place and regularly update it to combat the latest threats.
5. You don't have clear accountability lines for assuring subcontractors
A common concern among supply chain managers is that while they’ve got good assurance that their suppliers and contractors are in good shape, their visibility of the next tier down of the supply chain is poor. The natural tendency is to want to gain assurance of that tier and beyond too.
These conscientious supply chain managers often start the process of getting to know who the sub-suppliers are and start checking them, but the process is long and complex so it isn't always completed.
Sometimes they will insist sub-suppliers are chosen from an approved list. But when things go wrong, the first tier supply will rightly point out that you, the client, said that the sub-supplier was OK. With the best intentions, you’ve taken away their responsibility and accountability to manage their suppliers.
6. Your insurance bill makes your Financial Director wince
Rising insurance premiums may be a signal that there's risk lurking in your supply chain and your broker doesn't believe you have things under full control. By demonstrating that you have a grip on supply chain compliance, you should see premiums fall.
7. Team members are tightly stretched
Have you got too many people bogged down in non-value added, reactive activities? Are you under-using their skills to manage a clunky supply chain compliance process? Wouldn't it be better to utilise their talents for value added activities, such as developing your supply chain?
8. You worry about legal action
If things go wrong along your supply chain, how easy would it be to defend your actions? Have you got a full audit trail of all the up to the minute evidence available to instantly view and download anytime and anywhere?
9. You're asking too much from supplier assessment
Is your supply chain assessment tailored precisely to the risk each supplier represents and proportional and reasonable?
Are your suppliers asked to jump though unnecessary hoops and assessed on criteria that have no relevance to the work they will undertake for you?
Do you stress your contractors out each and every year, rather than keeping a continuous dialogue going and updating their evidence, as required?
10. There's a 'dark' side to your compliance process
Does your assessment system simply measure compliance and financial solvency once a year - leaving you in the 'dark' about the other 364 days and crossing your fingers that you've got things covered for the entire 12 months.
What happens when there's new legislation or business requirements? In these instances, do you have to wait until the assessment anniversary to bring compliance up to date?
Take the first steps towards a better supply chain performance
Designed specifically for smaller organisations, Exigo Essentials allows you to spend more time managing your business instead of your suppliers. The all-in-one software allows you to completely manage your supplier and compliance processes. Find out more and request your free demo of Altius Exigo Essentials here.
Photo credit: Walmart