Risk Management in Your Supply Chain: The Areas You Should Be Checking
If you have a supply chain, running regular risk management to minimise any supply chain risks makes sense. Here we explore the key areas that you should check.
What Is Risk Management and Why Is It Important in Your Supply Chain
Risk management in the supply chain is the strategic steps business operations should take to manage supply chain risk. These can be everyday risks and issues that may be unexpected. The key is to ensure that your risk management strategy covers all kinds of supply chain risks, ensuring that all eventualities are covered.
Risk management is as crucial within your supply chain as in your immediate environment. While many organisations will pay close attention to risks like health and safety, risk management strategies can cover a broad range of critical areas in your supply chain.
The Different Areas You Should Be Checking for Risks
All businesses should ensure they meet compliance standards in health and safety and take care that they have the correct insurance for their business and staff.
Supply chain risk management should not stop for many organisations, particularly those with a complex supply chain. If you’re a business owner with a supply chain, you may wish to consider the following key areas:
Identity — Ensuring you’re legally able to operate within the UK will minimise supply chain disruption as you’ll quickly and easily be able to provide relevant paperwork for suppliers.
Financial Health — Checking for financial risks across the supply chain safeguards against known and unknown risks that may impact income.
Corporate and Professional Standing — In terms of your supply chain risk management, this is important to answer concerning criminal activity, corruption, terrorism and human trafficking.
Environmental Risk — Examining raw materials, where they come from and identifying risks to the environment.
Quality — Quality issues can arise at any supply chain point, so it’s good to have robust quality control risk management strategies.
Equality, Diversity and Inclusion — This should be a consideration within your company and in your supply chain where possible.
Corporate Social Responsibility — This considers how you affect the surrounding community, so it makes sense to consider the communities affected by your supply chain.
Information Security — Security controls are important to have in place across your supply chain risk management ensuring GDPR compliance at every touchpoint.
Information Management — Information about how your business develops and who it is shared with across your supply chain is a consideration.
Anti-Bribery and Corruption — This ensures that procedures are in place to prevent anyone within the business from receiving bribes, creating a fair supply chain based on using the suppliers who are best for business continuity.
Modern Slavery — An essential part of your supply chain risk management, modern slavery ensures that there is no human trafficking across your supply chain.
How to Mitigate the Risks That Could Impact Your Business
The best way to secure your supply chain risk management is to run regular risk assessments that address all the key areas mentioned.
You may wish to get accreditation that covers these areas and mitigates risk in your supply chain and business.
Following your risk assessments, develop risk management strategies, a great way to minimise any supply chain risks to your business.
The Benefits of a Risk-Managed Supply Chain
The benefits of supply chain risk management are clear. When risk management is in place across your entire supply chain, it creates a smoother process, minimising supply chain disruptions and safeguarding reputational risk. Some additional benefits are:
- Ensuring the welfare of your team and others across the supply chain
- Building stronger supplier relationships with regular communication
- Gaining competitive advantage by showing strong compliance and credentials
- Reducing cybersecurity threats
- Preparing for natural disasters that can affect supply chains
- Getting complete supply chain visibility, giving you a clearer overview of the business
- Ensuring contingency plans are in place at every point of risk identification.
Tips for Staying on Top of Risk Management in Your Supply Chain
Supply chain risk management is an ongoing task and should be reviewed for every new project, each time a new product is released and something in the business changes.
This can be time-consuming work. The best advice is to review your supply chain risk management little and often, to keep up-to-date records.
By joining an accreditation scheme, you will gain access to support and tools to help you manage your supply chain risk. Some may even give you access to a database of other accredited contractors, ensuring compliance in the critical risk management areas important to your business.