Small Business Supply Chain: Managing Risk

Knowing how to manage risk in the small business supply chain is crucial in a world where supply chains run everything. There are many moving parts to any business and several risk factors you might face daily. 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 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. Threats to your supply chain can potentially disrupt or interrupt your standard operating procedure. Some disruptions are within your control and more accessible to adapt to than those outside anyone’s control.

Some of the most common supply chain risks include:

-Supplier relationships. Suppliers and vendors might be subject to the 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 considered distant indirect threats but have become legitimate risks to supply chains.

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

Optimizing your supply chain is the answer to managing small business supply chain risk. What does that mean? It means having a solution 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, ensure they’re giving you quality service, and understand their risks in addition to your own. Open and transparent communication between everyone in the supply chain means handling your customers’ shipping expectations more easily and lowering the risk of losing customers.

Be flexible enough to forge new relationships with new suppliers if needed. Relying solely on one supply partner is far too risky. The threat of supply chain fraud continues to persist, 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 staying in business and thriving. Shipping heavily impacts customer loyalty, so get the information you need from your suppliers that will affect how efficiently your supply chain can perform and communicate with customers regarding shipment rates and transit times.

Please maximize eCommerce shipping and give your customers the desired experience. Make the returns process straightforward. Follow through on your shipping rates and time estimates. All these reduce 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. An optimized supply chain can adapt to rapidly changing market conditions, weather impacts, cyber-attacks, or a pandemic. 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 your small business supply chain risk by partnering with a third-party logistics company (3PL) like FreightCenter. We can help you mitigate and control the risks your supply chain faces.

Start growing your business today and get a free online quote, or call 800.716.7068 and see what FreightCenter can do for your supply chain.