2020 has passed and, to be honest, the entire year was essentially one big supply chain disruption. Everything that could have gone wrong, and many things that we didn’t even know could go wrong, did. Fortunately all these trials and tribulations, for all the chaos they caused, instilled in many manufacturers the importance of creating supply chain risk management plans in order to be better prepared for the disruptions of the future. Knowing the importance of supply chain risk management and reacting to those risks effectively, however, are very different things.

According to research conducted by The Hackett Group, 19% of supply chains consistently fell short of effectively dealing with supply chain risks while 38% performed unevenly — occasionally properly recovering from supply chain disruption and other times not faring so well.

So, what can be done to avoid these same pitfalls in your own manufacturing ventures? What does a practical approach to supply chain risk management look like in 2021 and how can hardware like industrial grade PCs aid in their creation?

What Supply Chain Risks Do We Need to Look For?

Supply chain risks have existed for as long as supply chains have and so have plans to address these risks. Though that may be the case, however, we are still seeing manufacturers struggle. A practical approach to supply chain risk management in the modern day, as a result, must start with identifying new supply chain risks that have been brought up as a result of 2020’s tumultuous tenure. What are the risks we hadn’t considered before that we now know are possible? Identifying these will be the first step towards creating a supply chain risk management plan.

Future Pandemics

Pandemics exist and we’ve been made acutely aware of that. And with constant news coming out explaining that the coronavirus may end up being like the flu in that it will be recurring seasonally, pandemic and virus flare ups will likely become a more commonly occurring supply chain risk.

Disruptions like shutdowns, remote work shifts, and impacted foreign supply chain partnerships are no longer crazy occurrences and will need to be accounted for when creating a supply chain risk management plan.

Regulatory Compliance

Regulatory compliance has always been a variable to keep in close mind when dealing with supply chain risk management, however, the number of regulations needed to be followed is likely to increase as we continue to deal with the aftermath of 2020 and future pandemic issues. 

Whether these regulations are within your own region such as the Food Safety Modernization Act or effect partnerships abroad such as Europe’s recent commitments to reduce harmful manufacturing emissions, sudden changes to the regulations stand to be a major risk to your business’ status quo. Planning for them will be essential to creating a practical approach to supply chain risk management.

Fluctuating Demand

With a change in consumer behavior thanks to stay at home regulations, remote work, and more, comes a change in demand for different goods and products. Demand is set to fluctuate rapidly as new waves of virus, vaccine efficacy, and societal regulations all ebb and flow. Keeping an eye on these fluctuations and learning to predict them will be essential.

Creating a Supply Chain Risk Management Plan

Now that you know what problems to expect, you can start forming a plan to address them. Not only that, you can start to predict what your business stands to lose if one of these disruptions hit your supply chain. 

Things to keep in mind when crafting your risk management plan include: 

  • The financial impact you can expect to incur if you experience a supply chain disruption.
  • Backup suppliers of certain materials or goods that can be reached out to in case of an emergency.
  • Regular fine-tuning of your risk management plan as new risks are introduced
  • How to Train employees on the new risk management plan and adherence. 

What to Include in Your Supply Chain Risk Management Plan

Training Documentation

Your supply chain risk management plan is exactly that, a plan. It’s something that, while it should be flexible in response to unexpected supply chain impacts, should be clearly laid out and followed. Having a training program in place for your supply chain risk management plans ensures adherence and resiliency.

Training documentation can be shared seamlessly through workstations such as industrial grade tablets that can be carried around the floor and pulled up where they are most applicable. These documents can even be pre-loaded onto these tablets, streamlining the training process of new hires and even improving the reskilling process for veteran employees who need to be trained on new policies.

Data Capturing Systems

Sensors and hardware that capture data are essential for gathering information and the metrics needed to assess different variables like the financial impact of supply chain risks. Not only that, performance and diagnostic data drawn in from your machinery can also be used to predict breakdowns in hardware, another common risk to your supply chain. Inventory and available assets can even be closely tracked with smart hardware such as RFID and barcode scanning devices.

IoT sensors and Edge Computing apparatuses can ensure data is gathered in real time and even eliminates the risk of off-site data silos going under and limiting your access to crucial data.

In addition to these apparatuses, having workstations that can gather and consolidate the data drawn in from these sensors is also important. If you plan on using industrial mini PCs or rack mounted computers, finding a manufacturer who can equip these solutions with RFID or barcode readers can make scanning in inventory much simpler. Manufacturers who can do this and also build out custom rigs that promote functionality with legacy hardware/software can also make the adoption of these new stations much easier for staff. And the easier it is to adhere to your new supply chain risk management plans, the more likely your business actually will adhere to it. 

Communication Systems

So you have a plan, you have all the data you need and all of the supply chain partnerships you know you can trust to fulfill your essential activities. But none of that matters if, in the case of a breakdown, you’re unable to communicate with the people who need to be notified. Fortunately, there are tons of solutions that exist to make communication with disparate teams both safe from a cybersecurity standpoint and more efficient. Manufacturing communication systems, for example, that are built out to include a shared employee dashboard make sharing critical information simple. With blockchain ledgers as well, these communications can be properly protected and updated in real time, especially if used in conjunction with the workstation solutions we mentioned above.

Prepare For What You’ve Observed

Supply chain risks are still a normal occurrence but the types we’ve seen occur more frequently in response to a pandemic have changed. Creating a plan for supply chain risks has never been a groundbreaking recommendation, but you can never go wrong with updating your plans to meet current pain points. For more information on how you can start creating a program best fit for your business, contact an expert from Cybernet today.