What do you consider to be the greatest threat to your business?   

How about physical problems such as fire or water damage?  What about staff retention, computer system failure or lack of sales?

If you are totally dependent on your suppliers to deliver, what would happen if they failed?

Have you considered any early warning systems that highlight supply chain issues before they become major ones? 

Take a step back and have a think about things.  Are all your suppliers in one area or region of the world?  Do you buy your inventory from a single source?   As we all know strikes at ports or airports can cause havoc not just for passengers.  Natural disasters can destroy transport infrastructure very quickly.  If your suppliers have a fire or breakdown in production, how will your business cope when they can’t supply your needs?

Can you identify the weak links in your supply chain?  Do you regularly review the risk and tactically make decisions on who your suppliers should be and why?  Business emergency and contingency planning should also incorporate supply chain risk and recovery.   Create a damage limitation plan, review what the risks are and understand what you have to do strategically and operationally to manage the impact.

What you should think about in your plan: -

1. Review your existing supply chain structure, draw up a ‘map’ and plot where the problems could be, where  are the biggest risks and what the alternative supply options are
2. Review your inventory, make sure your stock levels are appropriate and that you know where and how to acquire the most crucial products quickly (even if it costs more)
3. Create a plan for when a disaster hits, don’t assume it never will

By analysing and planning for problems you can put in place protection against the risk of failure.  You understand any cost implications of failure and what it means to your business.  If you can still maintaining the service levels to your customers during a disaster you could be gaining a competitive advantage.

Other indicators that your supply chain could be failing: -

1. Out of stock and late delivery – your suppliers are failing to meet their agreed delivery dates and you can’t deliver to your customers
2. Transport and delivery costs – it takes longer and costs more to deliver to your customers
3. Reduction in effectiveness and increase in time taken for the whole internal distribution process from order receipt to despatch

By reviewing your supply chain and preparing a contingency plan you will have an understanding of what the problems could be and what action you would have to take if the worst happened.  By also analysing your inventory levels, supplier performance and business process workflow in your distribution centres or warehouse you should be able to minimise any impact of failure and maintain good service levels to your customers. Your inventory management system should be able to help you monitor the responsiveness of your supply chain.   

By using your inventory management system to:  

• proactively monitor and track late deliveries from suppliers
• highlight low stock levels on vital inventory
• late deliveries to customers
• delays in processing of orders and shipments in the warehouse or distribution centre

You should be able to anticipate where there might be problems and address them quickly as part of your overall business emergency and contingency planning.

To find out about the Inventory Management systems from SAP and Greentree and how they could help your business manage it’s Supply Chain issues just ring Nik on  08 8238 6500 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it .