How to Avoid 3 Common Supply Chain Risks

Meagan Douglas
Tue, Sep 29, 2015
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Unsupervised equipment can overheat and damage warehouse operations.

A supply chain comprises many moving pieces. A distribution process may involve warehouse facilities, inventory employees, transport equipment, third-party suppliers, delivery drivers and business managers all working together. If one part of the operation breaks down, the entire process may come to a sudden halt.

Recent studies indicate more businesses are aware of supply chain obstacles. Forbes contributor Steve Banker shared the findings of the Travelers Business Risk Index covering the last few years. In 2014, the researchers discovered 78 percent of manufacturers focused on possible supply chain problems. In 2015, the number rose to 91 percent.

Preparing daily operations for potential problems may seem like an impossible task. There is no way to see the future and some dangers come from forces far outside of the company's control. By studying three of the most common supply chain risks, however, a business can guard against likely obstacles.

1. Disasters
An inventory warehouse is a physical space. Unlike data processes or e-commerce transactions, it relies on a permanent facility to remain in operation. Natural disasters and other events may hinder local performance or interrupt interactions with business partners.

Natural disasters are not only hazardous to people; they can deal a huge blow to the industry of the area they hit. In 2014, global supply chains were crippled by tsunamis, floods and typhoons. The New York Times said these occurrences may grow increasingly frequent due to climate change or other modern environmental issues. The more locations a business operates out of and does business with, the more likely a major weather event or other disaster will strike.

Warehouse management systems need to turn their physical spaces into digital records. Arming inventory employees with automatic data collection devices allows a company to create a permanent record of activities the system protects from physical threats. Companies have to share the information with global partners or other distant stakeholders so physical location challenges don't confine the business. The data streaming in from other warehouse locations, suppliers and customers must all be visible in a centralized solution so company heads can see where all resources are during a crisis.

2. Accidents
Some disasters may come from within operations. Fire and chemical spills not only halt procedures, they put employees in danger. Supply chain managers must ensure workers perform their duties safely and properly.

Inventory management operations usually take place in large buildings utilizing a lot of power. The nature of the supply chain may call for conveyor belts, shipping trucks and forklifts. Occupational Health and Safety reported forklift accidents injure thousands of workers every year and a number of them are fatal. Heavy equipment may tip over, unsupervised equipment may break down or overheat  and careless employees can hurt themselves or others.

Proper training is a key factor in preventing warehouse accidents. Managers must teach each employee how to handle tools and equipment with respect. Businesses can equip facilities with devices that are easy to use and facilitate consistent, trouble-free performance. Mobile data collection solutions like voice-picking body mounted computers are simple to learn and leave the employee's hands free for optimum physical performance.

3. Obsolete Information
Being stuck in the past prevents one from preparing for the future. According to 2sustain, a business consultant, companies ignore risks when they operate using outdated information. The changing prices of supplies or drops in customer demand may catch a company by surprise if it only looks at previous trends instead of using its data to make projections.

Most companies operating today record the data involved with their business. The problem is, many businesses don't use the information they capture and just let it sit in a data warehouse. When they finally do get around to analyzing it, the information is outdated. Organizations need real-time data collection solutions. Automating processes improves speed and giving warehouse workers the devices they need to make information gathering part of their daily routines improves efficiency.

In an RFgen customer case study, Xerox Canada Ltd. changed its operations when the managers realized they were using systems that were too old to keep up with modern industry. The business partnered with RFgen to outfit their legacy software with web services and data collection devices. The two companies created a unified system that streamlined automated data collection procedures and prepared employees with up to date information. The new data collection solution was easy to learn and provided better insight into all supply chain operations.

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