How Companies Guard Against Modern Supply Chain Risks

  • Supply Chain
Droughts may cause geopolitic problems in the supply chain.

While technology and experience provide companies with supply chain logistics management solutions to streamline data processes, the modern world also offers unique challenges and increasing causes for concern. Businesses must take advantage of innovations to provide visibility of inventory management to prepare for the worst and consistently deliver the best.

Preparation is essential. Industry Week said best-in-class companies are most likely to prepare for dips in markets and geopolitical situations. As consumers become more informed, Businesses prepare for problems that waste resources, slow down operations and create negative public perceptions.

Problematic Suppliers

A global marketplace allows companies to shop around for the best supplier offering the most practical price. Working with partners overseas, however, opens a company up to honest mistakes and outright fraud, especially when geography stands in the way of visibility.

For example, RFgen works with a variety of military contractors that must guard against fraudulent parts and supplies – especially sent from particular regions in Asia. Certain vendors will try to pass off counterfeit technology as name brand pieces. The danger becomes increasingly frequent as more companies rely on electronic parts for manufacturing consumer products.

The supplies themselves are not the only risks, partners may try to cut corners when it comes to supply chain and warehouse management procedures. The Hapag-Lloyd transportation company reported a 65 percent increase in hazardous cargo mislabeling between 2014 and 2015, according to JOC. The company believes improper handling instructions were responsible for an explosion at the world’s 10th-largest port.

Hapag-Lloyd was able to measure instances of cargo mislabeling thanks to a new IT system implementation. All companies should acquire automated data collection solutions to monitor supplies received from vendors and report causes for concern to decision-makers. Warehouse must have strategies in place to quickly and accurately inspect incoming goods and automated warnings to prevent oversight.

Working in Other Regions

Technology that connects different locations provides solutions so businesses can open manufacturing facilities closer to natural resources or make use of opportunity-rich economies. Some organizations, however, exploit conditions and create negative perceptions of their industries. CNBC said unfair labor conditions in certain countries is a major problem and informed consumers will avoid businesses that take part in dishonest supply chains.

Hershey is a U.S. company with operations in China, India, and Mexico, according to The Wall Street Journal. To prevent problems and to make sure the business’s factories do right by local populaces, the brand created internal standards that it works hard to enforce at all of its locations. This way, the company can benefit from local cocoa fields while still marketing its commitment to corporate responsibility.

The brand also learns from its local partners and creates manufacturing and data collection solutions that integrate into existing best practices. Most companies should create manufacturing, warehouse and supply chain systems that work with unique procedures and provide consistent information records.

Major Disruptive Events

A hurricane can halt deliveries. Green Biz suggested companies should expect climate change to create more weather and political obstacles to global supply chains in the coming years. Major storms will hurt shipping and truck routes, while water shortages could cause unrest in certain governments.

It can be tough to predict the weather, but a company can’t be caught unprepared. A company must carefully evaluate its supply chain and at least recognize the most likely upcoming events that could prove problematic. It’s often a best practice to create alternatives for suppliers in particular countries or contingency routes to get around closed roads.

Flexibility should be a primary goal for supply chain logistics management. Manufacturing plants, warehouses and decision-makers need solutions in place to communicate data in real-time and view available resources. Mobile data collection solutions utilizing cloud-deployed ERP software are often the first step to providing every location with the intelligence they need in any situation.