De-risking your supply chain should always be on your agenda and never be left to chance. Whether it’s sourcing alternative suppliers, altering inventory levels during a disruption or profiling your supply chain every year – negating potential issues is vital for your ever-improving processes.
Supply chain performance experts, Altius, have defined a methodology that can help every one of their clients complete a supply chain risk profiling assessment. Here’s how you can take on board this methodology and complete your own supply chain risk profiling assessment in 5 steps:
1 - Identify key concerns
There is obviously a reason you’re reading this blog, and that is because you believe you need to make a change in your supply chain. Already you should understand just what the main problems are currently, or problems that you could face in the future.
Combined with your ‘gut instinct’ and general feelings about your supply chain, use the results of your latest audit to highlight areas you wish to improve.
2 - Stakeholder expectations
Are you managing your stakeholder expectations effectively? Are you even aware of what they require now or 6 months down the line? This stage is vital to those who are managing expectations that are set to rise in the future. Risk profiling at this step will ensure your suppliers can meet your demands along with expectations.
3 - Evaluate your suppliers
At this stage, you need to go through each individual supplier and review all the relevant risk factors. This includes their financial information, insurance policies, health and safety risks certifications and ability to meet your company’s quality standards. It’s at this point that Altius’ clients benefit from working with the team to fully evaluate their suppliers – especially if this is being done for the first time.
4 - Categorise supplier risk
Categorising your suppliers allows you to review your whole supply chain in one simple report. Although looking at the intricacy of each relationship is required, an overall perspective, in a traffic light system, for example, allows you to better plan depending upon issues and expectations raised in steps 1 and 2.
5 - Improve your supply chain
After completing the risk profiling, this step is now about acting upon the findings. Is it apparent that you need new suppliers? Do you need to review your relationship with an existing supplier? Is now the right time to change your key suppliers?
From here on the process should be straight-forward. You’ve done the research, you know the gaps and expectations, now it’s time to focus your efforts on improving your supply chain until the next risk profiling review.
Photo credit: Neil Tackaberry