Taking Supply Chain Risk Seriously

Although many businesses are aware of risks within the supply chain, few are able to keep up with the potential perils.  Supply chain risk and contingent business interruption are not held to a level that organizations take seriously.

If you are anywhere involved in the supply chain for your business, you are probably familiar with the supply chain issues brought about by the tsunami in Japan and Superstorm Sandy that devastated the northeast United States last year.  These two major events destroyed residential areas, as well as businesses located nearby.  The damage wasn’t as simple as downed power lines – buildings were leveled along with the ability to manufacture or distribute products in those regions.  What would happen if one of your first-, second-, or third-tier suppliers, or many of your suppliers, were located in those regions?

Calculating your potential loss, as a result of the weather, may seem strange, but it’s not the only reason to evaluate your supply chain.  Besides severe weather, you could experience inventory shortages due crop damage if you are in the food and beverage industry.  Political unrest and legislation changes can make it difficult to transport products.  The reasons are numerous and the solution is easier said than done.  At the end of the day, you need to know where your inventory and products are coming from, how they are getting in your hands, and at what cost.  Evaluating potential scenarios that could disrupt your supply chain is an important part of evaluating risk.  In addition to that, calculating the potential financial losses, while difficult, is just as important.

Enterprise resource planning (ERP) solutions that include supply chain modules, like those offered by Epicor® ERP, can provide both insight and control over your supply chain.  This powerful business management technology takes your valuable supplier data out of elaborate spreadsheets and puts it into a safe, actionable software solution.  The right ERP offers the ability to access supplier data swiftly, monitor inventory levels in real-time, and provides the ability to find alternate sources when a disruption occurs.

Any disruption in your ability to satisfy customer contracts can have disastrous consequences.  Unsatisfied customers lead to more unsatisfied customers and your business could be shuttered just as quickly as those businesses located in the path of Superstorm Sandy.  Managing supply chain risk and preparing for supplier disruptions is serious.  Contact RAM Software Systems for more information about managing supply chain risk and protecting your business future.

By RAM Software Systems, Epicor ERP partner out of Texas

About Michael Greene, RAM Software Systems, Inc

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