5 No-nonsense Steps to Mitigate Risk in Supply Chain Management

Practical supply chain management aims to identify the root causes of disruptions and take action to implement plans that minimize adverse effects. Sounds straightforward and elementary. But many organizations miss the mark, creating a ripple effect throughout the supply chain. Over the past few years, it’s been painfully obvious how fragile the global supply chain is for everyone—driving calls from the C-suite to the end consumer to make concrete improvements.  

Methodical and well-organized management tactics require a thorough understanding of the supply chain, close monitoring of key indicators, and the ability to respond quickly to changes. Let’s consider five supply chain management tips to effectively handle disruptions throughout the supply chain.

1. Monitor procurement & production processes.

Close monitoring of operations is critical during the procurement and production phases. In supply chain management, this monitoring process can involve tracking key indicators such as supplier lead times and on-time delivery rates, as well as monitoring overall market trends. 

With delivery metrics in mind, logistics teams can develop risk management plans that identify potential disruptions and outline how to respond. One effective way to track supplier deliveries is to maintain an automated supplier information database. Supply chain managers can easily track performance when all supplier information is in one place. 

2. Communicate regularly with suppliers. 

Throughout the production process, it’s also essential to maintain open lines of communication with suppliers to stay informed about potential disruptions. Establishing relationships with multiple suppliers increases flexibility and prepares supply chain managers for a disruptive market. Flexibility is possible when supply chain managers have continued access to an array of alternating suppliers and their rates. 

3. Have a contingency plan for distribution. 

During the distribution phase of supply chain management, developing a contingency plan that outlines transportation options is beneficial to the bottom line. Coordinate with logistics providers to ensure that products are delivered on time, regularly assessing the performance of your distribution channels and identifying potential bottlenecks that might disrupt the flow of goods. Consider implementing contingency plans such as alternative routes or carriers to mitigate the impact of disruptions. It’s crucial to have real-time visibility into shipment status, helping businesses optimize routes and take corrective action to reduce bottlenecks.

4. Apply checks and balances to payment systems.

In the payment stage of the supply chain, implementing checks and balances to payment processes can help reduce the risk of disruptions due to late payments. These checks and balances include automating payments and developing systems that track payment status. Third-party audits can be advantageous in identifying invoicing problems and providing systematic recommendations for improvement. So many invoice errors are undetected, resulting in missed or overpayments. 

5. Simplify supply chain management.

A TMS simplifies supply chain management from automatic production management to optimizing distribution and claims. Suppliers can easily monitor production processes, communicate with carriers, track shipments, and identify invoice errors with a multi-carrier shipping application.  

CTSI-Global’s freight and audit experts rely on the HoneyBee TMS™.  When procurement, production, and payment data all live in one place, visibility increases, communication is more accessible, and everyone makes fewer mistakes. 

CTA: Businesses count on CTSI-Global to manage contracts, process payments, and analyze invoice processes with our TMS and multi-modal audit technology. Talk to us about how we can optimize your company’s risk management plan.