Three Reasons Why Risk Management Matters

When things are going well in the office, it’s hard to imagine that in a moment, it all can change.  There are many things, both in and out of your control, that can disrupt business and cost you thousands if not millions of dollars.  Supply chain disruption is one of the most significant interruptions that a distributor or manufacturer faces, and supply chain problems seem to be on the rise.  IT outages, inclement weather, and outsourcing have been named as the most popular of the costly supply chain interruptions.  Even when operations are running smoothly, it’s important to plan for risk and here are three reasons why risk management should matter to you.

  1. Money, money, money:  You need to make and ship products in order to make money.  Every day that manufacturing and distribution operations are idled because you can’t get the right raw materials from your suppliers you lose money.  It’s important to know your supply chain thoroughly and plan for contingencies if there are potential weak links.  Knowing how to face possible setbacks will help you get back to business faster when there is a supplier interruption.
  2. Poor customer satisfaction:  Using disparate software or confusing spreadsheets is risky.  When your technology isn’t working properly, you may not be able to ship the right orders to the right customers, on-time, and in budget.  You can quickly lose customers with shipment delays, backorders, or invoicing mistakes.  Get organized with the right enterprise resource solution (ERP) software and you can increase customer satisfaction by providing a high quality product or service more affordably, and quicker, than competitors.
  3. Second place (or worse) reputation:  During the time your operations are shut down, your customers might seek a competitor to fill the need you were unable to fulfill.  When you are losing customers, your competitors are winning them.  Soon enough, you’ll lose your place as the go-to company.  Fixing a tarnished reputation takes time, and money, and not all businesses can last the long-haul for a comeback.

Just as you pack an umbrella on the days that it’s supposed to rain, you can make plans to protect your business against possible interruptions.  The right technology and an investigation into potential weak spots in your supply chain are the first steps toward managing risk.  Contact RAM Software Systems for additional information on protecting your business against risk.

By RAM Software Systems, an Epicor Authorized Partner out of Texas

About Michael Greene, RAM Software Systems, Inc

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