What to ask to improve the supply chain

     

Supply chain managers should live by the credo that no question is a stupid one. By asking about all areas of the organization's manufacturing process, a manager gains a better knowledge of its inner-workings and becomes empowered to make improvements where they are required.

According to a recent Insurance Journal report, Rhode Island-based insurance provider FM Global highlighted several such questions that all companies should ask when tackling supply chain management improvements.

 

Has risk been assessed and addressed?

All companies should look into the drivers of supply chain risk, as such threats can cause disruptions and delays that are costly in terms of both time and money, the report stated. By highlighting problem areas, companies will have a better idea of what may affect the performance of the supply chain and what can be done to mitigate and prevent the incidents from occurring in the future.

Can products be designed to reduce risk?

In some cases, according to Insurance Journal, the products themselves can help reduce the effects of numerous risks. Obviously, a simpler product will be better prepared the weather delays as its parts can most likely be manufactured quickly. However, it's important that companies don't lose sight of product quality when addressing this area.

How high of a priority is collaboration?

Hopefully the answer to this question is something to the equivalent of "very high." These days, collaboration can serve as the No. 1 factor in improving supply chain community management. That's because working more closely with suppliers and vendors, often through business integration initiatives, will give an organization greater visibility into the supply chain's inner-workings.

Does the company have a backup or disaster recovery plan?

Unfortunately, companies can plan, mitigate, collaborate and identify all the risks they want, but the truth is that disasters happen. That's become obvious this year with the incidents in both Japan and Thailand. What matters, however, how a company responds when it's put in a tough spot. It has to be sure that contingency plans are in place and ready to pick up the slack.

While it's important that companies keep up with supply chain management practices, that may not always be the case. According to the recently released Trends and Issues in Logistics and Transportation Study, the average company has integrated just 6.3 percent of key customers with collaboration systems and just 7.5 percent of key suppliers for sales and operations planning.

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