Supply chains are becoming more complicated across all sectors and customers are becoming increasingly aware that compliance issues can lead to unexpected incidents and risks.
The reputation of your brand as a whole can be scrutinised should your compliance standards fall into question, so completing a supply chain assessment every 12 months is essential. Whilst the importance of assessing supply chains is widely understood, completing it on a regular basis can be a job that slips to the bottom of your ‘things to do’ list.
Whilst the timeframe in which you should assess your supply chain depends on the size of your supplier list, here are 5 reasons why you should look to assess your supply chain every 12 months as a minimum requirement:
Industry standards can change
Legislation and industry standards are constantly evolving and these changes aren’t always transparent. It is important to assess industry trends every 12 months and identify how they have changed over the course of the year.
You then need to align these against your suppliers and check to see who is still meeting industry standards and, more importantly, those who aren’t. At this point, you can take advantage of knowing first that there is a problem and then acting upon it either by solving the issue together with the supplier, or simply ending your working relationship if their position has become untenable.
Financial situation of vendors could change
Financial situations that change for the worse for your suppliers can have a direct influence on your ability to trust them. Unable to deliver the same quality, the product on time, or even deliver the product at all means that you’re at risk.
An annual assessment that looks into the supplier’s ‘basic’ information such as their financial status, is just as important as the practical processes they have in place that are traditionally measured during an assessment. Whilst a negative financial situation should be flagged by your supplier to you anyway, it’s important to remember that not everyone will be transparent, thus showing the importance of annual assessments.
Certifications can expire
Similar to your suppliers needing to meet industry standards, your business will have internal standards that you need your suppliers to abide by. Certain certifications need to be renewed to show that a business still has the capability to operate to the level of which the certification is given.
If you don’t carry out an assessment of your supply chain every 12 months, then you may not know that your suppliers aren’t meeting your internal standards.
Vendor insurance policies could expire
This is extremely important. Your vendors having the correct insurance policies is almost as important for your business as your own. If they’re not covered for the work that they carry out for you, you could find yourself in a difficult and potentially costly situation should an incident occur.
By assessing your supply chain every 12 months and ensuring that each of your vendors have the right cover, to the correct level, you can save yourself from unexpected risks.
To ensure you are given the best possible service
As quickly as industry regulations change, so can the industry itself. A company that may not have met your high standards a year ago, or even offered the service that you require, could now be doing the job better than the supplier that you are currently relying on.
If you were to work with Altius for your supply chain management, you wouldn't even have to wait every 12 months to do an assessment - you can have things assessed when they expire, and if there is any change in financial situation for your suppliers, you will be sent an alert email.
Altius’ clients also benefit from reporting tools, allowing facilities managers to monitor their vendors on a regular basis which gives them tangible actions to improve their supply chain. Take a look at our supply chain health check here: