By identifying that type of risk, you can take steps to protect your supply
Andrew Kinder, Director of Solution Marketing, Infor
The greatest threats to the manufacturing supply chain rise either from internal factors such as a complex supply base and long, global material flows, or external events including supplier failure, currency fluctuations and scarcity of specific commodities.
You cannot eliminate risk but you can build risk management into your supply chain nmanagement processes. Risk management techniques allow you to drill down beyond first tier suppliers to their suppliers and base commodities at the beginning of the chain.
It’s important: the iPod Nano provides a cautionary tale. In the run-up to launch, Apple secured long term supply of the critical component, flash memory, preventing rivals from bringing competing devices to market.
If raw materials essential to your business are available from only one or two sources, fluctuations in demand can put your supply in jeopardy. By identifying that type of risk, you can take steps to protect your supply.
Supply risk management needs to be backed by effective IT Tsystems and simulation is a key tool for the job. Simulation is well adapted to network design which looks at the supply points, manufacturing locations, warehouses and transportation modes along your whole supply chain.
Supply chain risks often hide in plain sight. A formal sales and operations planning process that complements network simulation can offer senior management the means to assess future risks to supply, demand and the bottom line.
Business software specialist Infor is a partner to EEF, helping us develop strategic offerings for members.