Put your supply chain to the test.
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Supply chains are becoming increasingly complex, with dependencies upstream, in-plant and downstream. Which links in your supply chain might be most at risk? And what can be done to help manage it? Take our four-part questionnaire to help you uncover and avert potential risks in your supply chain before they emerge. Estimated completion time: 5 minutes.[/notice]
Supply chains are increasingly complex with dependencies upstream, in plant and downstream. Have you put your supply chain to the test? Not only will this brief mobile enabled test assist you in identifying opportunities within your supply chain, but the last page of the test will also provide educational resources and insights on how you compare to your industry and region.
Controlling threats that can impact the flow of quality, compliant and competitively priced raw materials is a critical link in your supply chain. Upstream disruptions often flow downstream. One delay, shortage, or defect in the materials you rely on could affect your ability to produce goods in the quantities and time-frames consumers demand. One could even compromise the safety and quality of your products. Failure to meet orders, product recalls, liability claims, and other potential ripple effects of supply disruptions can put your company’s reputation — and bottom line — at risk.
Control Your Supply Sources
Purchasing and vendor control are critical parts of the manufacturing process. Knowing who your suppliers are and where they come from is key to managing supply chain risk – particularly if they come from outside of the United States. Companies often change vendors frequently to get the lowest prices on raw materials. But establishing longer-term relationships with your suppliers can be an advantage. A supplier who understands your business might better anticipate your needs and be more willing to work with you to control costs or resolve issues when they arise.
Choose your suppliers carefully:
- Know who supplies your suppliers
- Review and approve your suppliers’ quality control processes on a regular basis
- Ensure regulatory and legal requirements are met by your suppliers
- Oversee your suppliers’ engineering controls, component inspection and testing
- Review your suppliers’ certificates of insurance and their business continuity plans
- Have an attorney review all contracts with consideration for transfer of risk where possible
Inspect Your Materials
Contaminated materials, defective components, counterfeit parts – all can lead to injury or property damage, failure to comply with safety and environmental standards, increased cost for warranty repairs, or decreased sales and satisfaction. Strict inspection and formal documentation of all materials used in the manufacturing process is advised to prevent quality and safety issues down the road. Here are a few steps you can take to help minimize the risk:
- Supplement your quality control process by using independent, third-party testing services to verify authenticity and quality of materials and parts
- Validate quality of materials and parts upon receipt
- Know how to identify counterfeits
Have a Backup Plan
Having a trusted network of backup suppliers to keep operations running smoothly is critical to managing risk. Develop and document strategies to help protect against interruptions in the delivery of your most important inventory and services. Practice the same strict oversight in choosing your backup suppliers as you would your primary providers. Also be sure to include a communications plan to notify affected customers if a supply disruption may delay their order.
Remember: no manufacturer is immune to supply chain risk
Take this as an opportunity to turn your supply challenges into business advantages. Consult with your company’s risk management adviser and insurance agent/broker to better assess where your supply chain may be vulnerable, then work together to reduce or remove any pressure points.
[code]Disclaimer: The information you provide while taking the Supply Chain Pressure Test will only be used in an aggregate format to enhance our services to the users; it will not be used to identify your company or your company’s risk in any particular area. We will not sell or market your information to any third party. We reserve the right to change the data or output at any time without notice. Your use of this tool does not amend, or otherwise affect, the provisions or coverage of any insurance policy or bond issued by Travelers or any of its subsidiaries, nor is it a representation that coverage does or does not exist for any particular claim or loss under any such policy or bond. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy or bond provisions, and any applicable law.[/code]