Nearly every company has experienced a supply chain risk event that has disrupted their supply chain management. In fact, Resilinc’s EventWatch Report noted global supply chain risks increased by 36% in 2018 alone. In particular, the data showed many global supply chains are unprepared when faced with these challenges.

Contemplating what to do if an event happens isn’t enough. The key is to instead plan now for when a risk event inevitably happens. Here’s a list of tips on how to identify and mitigate risk in your supply chain:

Identify All Possible Risks

First, take a critical look at your business and pinpoint areas where risk exposure is likely. Consider as many potential supply chain disruption scenarios as you can. Some risk events are often out of your control: fires, explosions, theft, natural disasters, cyber threats, government, and political threats.

You can’t always prevent things from happening. Still, you can prepare for them, and in the case of fires, explosions, or cyber risks, implement safety measures.

Prioritize Risks and Assign Value

It’s nearly impossible to address every scenario that could ultimately impact your supply chain. What you can do is prioritize risks by how likely they are to occur. Be sure to assign a dollar value and assess the brand impact for each risk event.

Based on this evaluation, rank the risk events based on probability and impact. Use this ranking to develop your company’s contingency plans.

Involve Partners in Risk Planning

Work together with your key partners when it comes time for risk planning: suppliers, transportation carriers, data management centers, and customers. Don’t forget to include a third-party logistics company (3PL) like BR Williams.

A quality 3PL can help define responsibilities and handle storage, transportation, and product delivery, so you don’t have to. Risks can affect everyone, so your partners’ mitigation plans must match up with yours. Not to mention, it demonstrates how you value them as partners.

Assess Supplier Risks

Nearly all supplier risks come back to finances. However, many companies don’t have adequate visibility into their suppliers’ financial situations.

Therefore, it’s crucial to stay up to date with economic and business trends to manage financial risk. Pay attention to regulations compliance, economic uncertainty, and political conditions, as they can all impact a supplier’s ability to serve you.

By working with a 3PL, you can leverage their insight into technology with GPS tracking, proactive tracking alerts, and other visibility tools to ultimately ensure supplier viability.

Protect Your Company with Cargo Insurance

Insurance is vital to your supply chain. You need to protect in-transit shipments and warehoused goods, regardless of where they are. Be sure you’re covered by discussing all risk scenarios with your 3PL. Policies can vary in coverage and price, so it’s essential to understand your insurance policy.

Sound communication and collaboration with a 3PL can not only limit risk, but it leads to low claims and other charges. Working with a quality 3PL can also produce constructive ideas that lead to cost-effectiveness and business efficiency.

Regularly Review Risks

Set up a time at least once a year, or another frequency that makes sense for your business, and regularly review risk scenarios. It’s a great time to conduct a risk assessment when there is a change to your supply chain. Planning and preparation are the best ways to protect your company’s supply chain.

Risks pose a costly and disruptive impact on your company’s supply chain. You don’t want to be scrambling when a disruptive risk event occurs. A resilient supply chain requires strong visibility, crisis contingency plans, and robust communication when disruption inevitably occurs. Request a quote today to see how BR Williams can streamline processes and improve your services.

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