How to identify risks in your supply chain
As each week passes, companies experience more and more disruption due to the impact of COVID-19 on the global supply chain. A report released by McKinsey shows that many industries across the world have been impacted by the crisis, while Deloitte suggests that the global economy could be impacted in three main ways including “direct impact on production” and “supply chain and market disruption”. That is why today we are focusing on the steps you can take to find out how to identify risks in your supply chain.
Supply chain visibility is the first step for companies to assess risks. For that, the first step is centralizing information to ensure that all product data, information, documentation or any other relevant content is stored in a central place where it can easily be found, used and trusted as a source of truth. This is easier said than done.
As more and more companies turn to remote working to safeguard employees in these challenging times, it becomes crucial to successfully manage data. To help solve this problem, integrated collaborative tools make it easier to gather information in one place and work as a team safely and remotely, from anywhere in the world. Certain tools can help you upload information about your products quickly via Bill of Materials importers, while advanced APIs allow your teams to extract key information from systems like CAD, ERP, and PLM. This way, the whole organization is on the same page and can collaborate more efficiently.
Makersite creates a digital twin of your product and ensures that your team is working with a single version of the truth they can trust to collaborate on solutions.
Integrate supplier information
Most modern supply chains are complex and include multiple tiers. Yet data indicates that most companies only have visibility of their Tier 1 suppliers and risks are increasing the deeper the supply chain. Actually, at Tier 2, audits identify 18% more issues than at Tier 1.
The old techniques of sending out a couple of supplier questionnaires to a selected few and hoping for accurate responses rarely meet companies’ needs today, even less so in a time of crisis like the one we are experiencing now. Nevertheless, transparency is mandatory for any business aiming to build an effective supply chain. So instead of basing a hypothesis on questionnaires that rarely cover the complete picture, companies should be able to draw conclusions from first principles. Knowing the entire value chain of a product, from raw materials to the finished product, makes it easier to pinpoint risks and look for suitable alternatives.
Using the latest advances in AI and knowledge graph technology, you can match your products’ components to suppliers across the world allowing you to identify which alternative suppliers meet your requirements and track compliance issues, as well as identify and mitigate risks.
Map and model this information
The next step for you to fully understand your supply chain is to provide context to the information gathered during the previous steps. Especially when dealing with complex products or portfolios, it is important to understand the interactions between datasets to identify incoming risks and determine relevant replacements for missing parts or substances.
Data comes alive with powerful visualization solutions that transform centralized data, highlighting both relevant connections and gaps which could be a source of risk. This approach increases transparency across the supply chain to support fast, efficient decision making.
Identify disruptions early and forecast the outcomes
Now that your team has a reliable, centralized model of your products, it is time to dive in. A good starting point is localized views, as it will help identify suppliers in different regions that will likely be affected by lockdowns and sort through alternative suppliers still operating or in safer zones.
You can use supplier finder applications to locate alternative suppliers for key products, components or materials at risk of shortages in your manufacturing process. These applications can also help you source key products such as PPE which are essential to maintain the level of Health & Safety required to continue production while keeping employees safe.
The onboarding of new suppliers can create additional legal risks or potential for exposure, which will likely put pressure on compliance teams. Strong collaboration between all departments can help speed up decisions and reduce further disruption.
To help make sure this step goes as smoothly as possible, your team can use built-in supplier request application to request product data, supplier information, and compliance documents.
Makersite’s enhanced team and supplier collaboration features throughout the platform ensure that your team can manage this process safely and remotely, from anywhere in the world.
Plan for the future
In a time of uncertainty, it is critical to first implement short term steps to mitigate the immediate impact. But it is even more important to then turn to the medium and long term to ensure resilience for the future.
Be prepared for the next crisis by analyzing different case studies or scenarios to help identify the risks associated with different paths and determine the levers which could be activated when things get tough. Use this information to develop emergency and risk mitigation plans to respond to future crises and build resilience for the future.
Set flags to warn of potential future risks, send notifications of new compliance regulations, optimize every aspect of products in record time, or use the AI-powered suggestion engine to help find suitable alternatives.
If you would like to go further, you can sign up for these simple tutorials that we hope could be helpful for anyone struggling to assess the impacts of COVID-19 on their supply chain.
You can also get in touch with our experts to find out more about how to identify risks in your supply chain with Makersite here.