Manufacturers rely on a constant supply chain in order to make finished products for consumers. If one link in the chain breaks, projects are delayed and products remain off the shelves. As part of risk management, how your company receives parts and raw materials for the production line should remain a top priority.
Information security and intellectual property rights have become buzzwords in several industries in recent years. Patent fights between cellphone makers, technology firms and software companies continue to present problems for companies with a large supply chain. How do you protect sensitive information while simultaneously giving suppliers the data needed to procure the correct parts?
The first step is knowing how your supply chain manages information security. Can any single employee steal company secrets? Even something as small as a marketing plan, leaked onto the Internet by a careless employee, can create havoc and tip off the competition. Your company must determine how well business partners and suppliers guard information from hackers and data breaches.
Lessen cyber-security threats by using up-to-date technology that protects your data. Encrypt transmissions between tablets, laptops and automated machinery to make your manufacturing process secure, stable and efficient. Track and protect as much data as you can, from the smallest supplier up to daily sales figures.
Mitigate supply chain risks by creating scalable, repeatable processes. If your company needs steel plates one year and glass the next, design a way for one supplier to do both. Build up trust with a few companies that can do a lot for you rather than 10 companies that compete for your business.
Collaborate with other industry partners through industry groups, trade groups and online forums. Discover what you can regarding other supplier issues to ascertain current trends within your industry. Did the price of copper go up last week? Was there a mining strike in Chile? Find out by using trusted industry insiders.
Assess your risk management using the Supply Chain Information Risk Assurance Process from the Information Security Forum. This process helps companies review what they do now and how they can improve information risk at all levels, including vendor management.
Global demand and volatility mean your company may get raw materials or parts from all over the world. Your Japanese supplier of microchips may have a solid foundation for quality work, but what if that company gets raw materials from Brazil? Do you know what the Brazilian company does to alleviate your risk? What if one of your suppliers gets its raw materials from an unstable part of the world such as northern Africa? Your company must examine all parts of the chain and not just your suppliers. Who supplies your suppliers?
When it comes to managing risks along your supply chain, knowledge is power. Once you determine the risks of having one supplier over another, move to correct any threats. No plan or chain is 100 percent safe, but identifying major risks represents the first step to improvement.
Photo courtesy of David Castillo Dominici at FreeDigitalPhotos.net
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