In a world where supply chains run everything, knowing how to manage risk in the small business supply chain is crucial. There are many moving parts to any business, and there are several risk factors you might be facing every day. The same applies to managing your supply chain and knowing how to manage risk in the small business supply chain will set you up for success in the long run. We’re diving into the world of supply chain risk management and how your supply chain can operate at total capacity.
What Are Supply Chain Risks?
The first step to managing risk in the small business supply chain is identifying what supply chain risks are out there. Risks to your supply chain are anything that can potentially contribute to disruption or interruption to your standard operating procedure. Some disruptions are within your control and easier to adapt to than those outside of anyone’s control.
Some of the most common supply chain risks include:
- Supplier relationships. Suppliers and vendors might be subject to their own set of risks posed by economic conditions. They might go out of business or face some reputation damage. Having the right resources around you at the right time reduces risks.
- Weather disruptions. Natural disasters have an impact on multiple parts of the overall supply chain. Dangerous conditions on the road mean drivers can’t drive and supplies get delayed. Weather affects your freight shipment more than any business manager would like.
- Economic interruptions. Global pandemics. Cybersecurity hacks. These are scary things once thought of as distant indirect threats but have become legitimate risks to supply chains nowadays.
Small business supply chain risks come in all shapes and sizes, be sure your supply chain is covered from all sides.
How to Manage Risk in the Small Business Supply Chain
The answer for how to manage risk in the small business supply chain is to optimize your supply chain. What does that mean? It means having an answer for all the supply chain risks we mentioned above and for others that might arise and still be able to operate at 100%. Here are a few tips to help you manage risk in the small business supply chain more efficiently:
Foster Strong Supplier Relationships
Managing risks in your supply chain starts with your suppliers and vendors. Manufacturers are still feeling the impacts of material shortages and price hikes. That means you have to stay on top of your suppliers and make sure they’re giving you quality service and you understand their risks in addition to your own. Open and transparent communication between everyone in the supply chain means you can handle your customers’ shipping expectations easier and lower the risks of losing customers.
Be flexible enough to forge new relationships with new suppliers if you need to. Relying solely on one supply partner is far too risky. The threat of supply chain fraud continues to persist even these days, so build any new or continuing partnerships on trust and professionalism.
Optimize the Customer Experience
Small businesses embrace the world of eCommerce more and more, which means meeting customer expectations is key to not just staying in business but also thriving. Shipping heavily impacts customer loyalty, so get the information you need from your suppliers that will impact how efficient your supply chain can perform and communicate that with customers in terms of rates and transit times for shipments.
Make the most out of eCommerce shipping and give your customers the experience they want. Make the returns process is straightforward. Follow through on your shipping rates and time estimates. All these add up to lowering the risks of disruptions in your supply chain.
Expect the Unexpected
Incorporate a business continuity plan in your supply chain strategy to help handle unwanted surprises. Whether it’s rapidly changing market conditions, weather impacts, cyber-attacks or a pandemic, an optimized supply chain can adapt. Managing risk in your supply chain means staying prepared for everything you can and can’t think of. Be flexible, and always stay ahead of the game.
3PLs Help Lower Supply Chain Risks
Manage risk in your small business supply chain the easiest way possible, by partnering with a third-party logistics company (3PL) like FreightCenter. We can help you mitigate and control the risks your supply chain faces.