Why supply chain security is important?
Supply chain security has never been more important to protect the flow of goods and resources. With supply chains more interconnected, and many spanning across multiple countries, supply chains are now more vulnerable than ever. If something was to happen to cause disruption, not only do organisations face financial difficulties, but also the organisation’s reputation could be on the line from stock outs and late delivery of goods to customers.
Supply chain security does not just involve physical threats, but increasingly cybersecurity threats which relates to attacks on your software and services. With data often accessed at any tier in the supply chain, a threat can impact up and down the supply chain. Cybercriminals will often attack a weaker organisation to access sensitive data, so ensuring you have a secure supply chain is paramount.
What are the four types of risks in the supply chain?
Environmental risks can be both internal and external. Internal risks can cause fires, spill and other hazards if there are no health and safety measures in place. External factors such as natural disasters and extreme weather conditions can pose a risk to organisations. These are impossible to predict, so its important organisations have recovery plans in place if there are disruptions.
Political risks such as government policy changes, terrorism or energy crisis, all pose a threat to your supply chain. Organisations must remain aware of any political trends in the country of their suppliers, throughout the whole supply chain.
Economic risks can have huge effects. As supply chains become more widespread and often span across multiple countries, currency fluctuations and instability in demand can make it difficult for organisations to plan.
Cybersecurity is emerging as a really threat to supply chains. With technology advancing, so do the complex nature of cyberthreats and hacks.
How do you mitigate supply chain issues?
There are many things you can do to ensure you have a secure supply chain. A clear picture of all your suppliers in your supply chain is key. It’s important to not just look at your immediate suppliers, but also to work out who is supplying to them too, as these suppliers could also have access to your data and information.
Once you have your supply chain mapped out, you’ll need to assess and monitor them against a number of factors. These factors could be resources, equipment, commitment to quality standards, policies and procedures and also financial health. This will not only help mitigate risks but will also increase your supplier relationships.
When it comes to supply, it’s key to not depend on one single supplier. Having a diverse supply base, and even a secondary key supplier from a different geographic region, can help lessen the impact if a supply chain issue occurs. Overall, it’s important to collaborate and communicate with all of your suppliers, to help reduce errors, costs and mitigate any potential risks.
Author: CIPS
