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determining risks in supply chain management

by:Joacii     2020-03-26
What is the inherent risk of supply chain management?
What are the main concerns and what do companies have to do to ensure they protect their interests, reduce costs and run effective inventory?
While these issues are addressed to some extent, all companies must recognize some fundamental risks when operating the supply chain.
This means understanding these risks and being aware of their dangers.
When companies evaluate their supply chain, they usually start with the assumption that the lowest price for parts and materials is the final priceall-be-all solution.
While no one can argue that lower prices are good, other ways to reduce costs may have an impact.
In fact, it is aware of these other methods that help reduce the cost of inventory ownership and point the way for running a more efficient supply chain.
Expanding the perspective of supply chain management will provide impetus for change, promote improvement and ultimately reduce costs.
So, what are the risks in supply chain management? 1.
Poor supplier management the right supplier can play an important role in the company\'s supply chain.
They can help reduce costs with bulk discounts, use contract supply agreements that help reduce the cost of holding stock month, and help reduce the shipping costs for bulk shipments.
However, the wrong supplier can do exactly the opposite.
Companies must adopt strict supplier qualification procedures, not just price issues.
When the order is not filled in properly, the wrong parts are received or damaged due to improper packaging, the savings on the price are easily eroded.
The best companies have processes related to supplier performance evaluation and competency evaluation in these areas. 2.
This is the most recognized problem in supply chain management.
Delays or delays in parts and materials from suppliers mean that companies themselves will be late and customers will be unhappy.
Delays are commonplace.
They always happen for various reasons.
It is understood that there will be some kind of delay at some point.
This is unacceptable when there is no way for the company to resolve these delays.
Having multiple approved suppliers helps reduce this risk.
However, it would be better to say further.
Running the best supply chain ensures multiple approved suppliers and contract agreements with all suppliers.
The correct agreement ensures that the company always has a safe stock wait when any particular supplier encounters a delivery problem. 3.
Damaged and out-of-date parts, inventory method bad inventory damage is a complete waste.
When the part is damaged to a point where it can no longer be used, these losses cannot be recovered at all.
Outdated inventory is equally disruptive because there are fewer and fewer ways to use these parts, and fewer customers interested in receiving them.
The worst case, however, is when companies do not know that their parts and materials are damaged and assume that the quantity in stock for these items is good.
They either do not check the inventory or do not properly isolate the inventory.
This means that a company will only find out at the last minute that they cannot use the parts.
Then, when they try to rush in with high Express charges and high shipping charges, they incur huge costs. 4.
Poor quality, high freight. Needless to say, quality should always be the most concerned issue.
Companies that decide orders based solely on price and price often find the danger of ignoring supplier quality.
They exacerbated the problem by checking the bad incoming quality control of parts that were not found to be defective.
However, the biggest problem is that when the company ignores
Unit freight for incoming parts and materials.
The cost of inventory far exceeds the price of the product.
This price contains the shipping cost to and from the warehouse.
The higher the freight, the higher the cost of ownership, the smaller the impact of price savings. 5.
One of the biggest risks in supply chain management is the operation of supply chain and inventory methods that are not conducive to the company\'s business model, its market or customer order model.
It\'s been happening.
Someone read about JIT (Just in Time)
Work for a big company and decide to run the system in its own business without asking first if it is appropriate.
Companies running successful JIT have linear and constant customer needs, a large demand for parts and materials, and strong purchasing power, which helps them become the first priority of suppliers.
Companies with periodic and infrequent customer needs, smaller purchasing power, and smaller transaction volumes should run a minimum/maximum inventory system, or at least, make sure they have a safe stock in the blurry part.
Putting all this together to determine the risks in supply chain management requires awareness that cost savings include not only the purchase price of parts and materials.
The lowest price is not always the best option if these parts are late, poor quality, easily damaged, rarely supplied or from unreliable suppliers.
The most important aspect of proper supply chain management is to understand all the costs of inventory and to develop plans to reduce its impact.
Some companies use their most pressing list of issues and risks when managing their supply chain.
They use this list to develop a cost-cutting plan that focuses on analyzing the total cost of ownership, not just the purchase price.
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