When you’re crunched for time and need to get your products where they need to be quick, it’s easy to look for a quick or cheap solution. You’re under pressure, you have deadlines, you’re up against competitors, and you have a budget to meet.
However, taking shortcuts or making assumptions when setting up your supply chain quite often leads to unnecessary risks that end up costing you even more in the long run.
Here are the five supply chain risk management mistakes companies make:
1. Not Having a Diverse Supply Chain
There’s a huge risk in not having a diverse supply chain, especially when it comes to raw materials. You should have multiple suppliers across diverse geographic areas so that you’re not reliant on one part of the world. Things can happen that influence the availability of a particular product and transportation can be a challenge.
2. Not Staying Current with Technology
If you don't stay current on technology, you’re going to fall further and further behind. For example, if you’re using electronic loggers and the components for those loggers become obsolete, you may not be able to support new customer requirements and requests. Don’t stake the integrity of your brand on old or possible obsolete technology!
3. Not Enough Visibility to Your Supply Chain
Lack of complete visibility is a critical mistake that far too many companies make. When you only look at snapshots of your supply chain, you don’t have insights into what’s actually happening at each level. That’s a tremendous risk which will come at the expense of your customers, your products, and your brand.
4. Not Being Aware of Competitors and Market
This one really ties in with #2. You need to know what your competition is doing as well as what new technology is being used in the marketplace. Being ahead of your competitors’ process or setting yourself apart from their products (versus being a “me too”) will allow you to enhance the overall customer experience and streamline manufacturing to delivery.
5. Using Low-Cost Solutions
Making supply chain decisions that are financially-driven instead of working with qualified suppliers is quite often a recipe for disaster. There’s a reason people say that “you get what you pay for.” Keeping costs down is obviously important, but make sure that you’re still getting a quality solution that doesn’t take shortcuts that end up costing you more in the long run because of product recalls or legal fees.
In times like these, we’re really seeing the vulnerabilities and weaknesses of supply chains all over the world.