Hannibal from the A-Team loved it “when a plan came together”. That’s because he always had a plan. When it comes to any supply chain, there are a number of internal and external risks which threaten to put a kink in it.

Like Hannibal, you need a plan. Unlike Hannibal, your plan shouldn’t involve semtex. Supply chain risk management is where it’s at.
This basically means the implementation of strategies to manage everyday and exceptional risks along the supply chain.
You can do this by way of continuous risk assessment with the objective of reducing vulnerability and ensuring continuity.

In other words, plan ahead

The first step towards limiting the impact of supply chain disruptions on your business is to identify the risks. Your business, of course, is unique. The risks will therefore be unique to you.
Even so, there are a number of broad risks which ripple down even the securest supply chain. Procurement leaders have condensed this down to four major risks: price, quality, delivery and reputation.

Supply chain risk 1: things are pricey

Inflation and volatility – two words no one likes to hear. Price fluctuations can indeed have a big impact on your overall business continuity plan. It can impact negatively on your supply chain. It’s important then to factor this into your supply chain risk management plan.
To mitigate sudden upswings in prices, some supply chain managers aim to agree longer term contracts. They do so to reduce the impact of future price hikes. Is there a downside to this? Potentially, yes. After all, the ability to act with agility is a favoured friend of business. Let’s say deflation occurs. When you are locked into fixed price contracts you’ll miss out on the gains.

Supply chain risk 2: a quality service

Different packaging is used to transport different media. Let’s say your packaging fails. This compromises the efficacy of the contents. Likewise, it might be impossible to load the damaged packaging onto the assembly line. The end result? Operations hit the buffers.
Plan ahead of time. Invest in the right packaging. Maybe the contents require bespoke packaging. Maybe some level of temperature assurance is needed.
Quality risk management should start long before your product hits the supply chain. This helps automate production. It reduces human error. It keeps your supply chain oiled up.

Supply chain risk 3: the delivery man

Nobody likes it when the mail turns up late. Now multiply that feeling by 10,000. Then you’ll be somewhere near to experiencing the emotions of your client when delivery fails to materialise.
First in the firing line? The logistics and purchasing teams. Failure to deliver the physical goods can have a devastating impact on the supply chain and overall project.
Supply chain risk management means seeing into the future. It means considering all the possibilities even down to ice on the road. Thinking ahead keeps your supply chain ahead.

Supply chain risk 4: build your reputation

You’re only as good as you say you are. Likewise, the ability to deliver on time can have a direct impact on your partner’s brand. The internal pressures on your supply chain are indeed high.
Remember: you can’t build a reputation on what you say you’re going to do. So your supply chain risk management should define how you can deliver on time, to the agreed quality and at cost. Actions always speak louder than words. Your actions will define your reputation.
Risk management must also weigh up external pressures such as public perception. The general public believe – and rightly so – that businesses operate with efficacy. Brands quickly become tarnished when they are considered to have broken a legal or moral code.
Understand your legal responsibilities. Understand your moral duties. Remember the core principles of your brand. Ensure they remain true in your supply chain.

Author

Phill Allen

Managing Director

An in and outside the (bioprocess) box thinker, fluid management specialist Phill knows a thing or two about keeping pharma liquid logistics flowing.

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