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Supply chain risk management requires processes that are easy to implement and that can easily be enforced. Modern enterprises are face more and more with finding ways to actively protect the supplied goods while keeping costs down. Most enterprises spend the majority of their investment shares on supplied goods so having reliable measures in place to protect these goods is imperative.
Market globalization has many benefits but it also poses new problems. The longer supply chains means that there are more room for errors and disruptions. The primary need is to identify the risks and take actions to put plans in place that will prevent damage to the goods.
Loss of supplies can easily bankrupt any enterprise. Protecting the supplied goods is an activity that has to take front and center in any industry. It is one of the most valuable practices to help grow any industry. In many cases the biggest errors are made when it comes to packaging, shipping and storing supplied goods resulting in a great deal of losses.
The supply chain is getting much longer and for many organizations their policies and activities are not keeping up. The old ways of doing things are not really able to be implemented today. No longer is the majority of supplied goods from local vendors instead a good amount of supplied goods come from half way around the globe.
As the supply chain grows so does the need to implement better monitoring, planning and activities that are geared toward addressing the longer supply chain. The proper logistic planning and strategies can easily help to reduce waste and protect the supplied goods no matter how long the chain is.
Setting up a Plan
There are a few key considerations that can help to quickly identify risk and used in planning:
- Review internal and external environments for fault
- Identify risk and assess the risk
- Treatments for risk
- Setup continued monitoring plans
One of the steps in protecting supplied goods is determining what you can be doing differently. Reviewing internal and external environments for fault closely can help to better plan for risk reduction. Protecting supplied goods is easiest when the threats have been identified through a complete evaluation process.
Internal and external environments are one of the biggest factors in protecting supplied goods. Environments can be controlled for climate, pests, air quality and space management. Identifying risks of the internal and external environments and developing a plan to offset the risks can provide an ideal safe location that will protect the supplies.
In many cases supplied goods are damaged or lost due to the internal environment where the supplies are stored. An evaluation of all spaces that the supplies will pass through and be stored in is a necessity to ensure that the supplied goods are protected.
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There are different ways to mitigate the risks that are most common. Once an organization has identified and prioritized the risks that it faces, it can easily develop risk management plans. This includes measures that include plans to handle events that rise that may cause an increase in risk to the supplies.
Planning for disruptions and ways to measure the risks and effectiveness of the plan itself and to limit or extend the plan into other areas of the supply chain to ensure satisfactory protection across the entire supply chain.
Enterprises should also plan on continued monitoring activities to reduce risk. Periodic planned reviews should be undertaken to ensure that the plan is having the outcome that is expected. Monitoring activities should include identifying opportunities for improvements.
Longer supply chains because of the global market require more “detailing” than ever. They require better communication and collaboration because of the length of the supply chain. Ensuring protection for supplies requires that collaboration between all the members of the supply chain is able to share information, alert to any issues that may affect the protection of the supplies and be a part of the improvement process.
Mapping out the supply chain and looking for the weak links is another way to beef up the protection of the supplies. Map out the complete chain and look for areas that can use some improvements. Collaborating with the members of that part of the chain can help to fix immediate issues. Once the immediate issues have been addressed long term plans can be put in place to avoid the same breakdown in the future.
The Case for Proper Packaging
Supply chain risk management can only provide so much support if the right type of material packaging is not in place. Much of the risk faced can be controlled with the proper packaging techniques. Pallets are the standard in most industries but pallets alone do not offer enough protection.
There are options that can help to protect the supplies but not all of the options will give the type of protection that is warranted to prevent loss to the supplies. Some examples are listed below with both their advantages and disadvantages:
|Type of Enhancement||Advantages||Disadvantages|
|Shrink wrap||Easy to use||Does not protect the contents. Is not the best options for stacking. Does not provide any stability for stacking. Does not provide any security.|
|Pallet Walls||Provides security. Protects the contents. Can be stacked.||Can be difficult to use. Tools are required to assemble and disassemble. Not adjustable.|
|Pallet Collars||Economical. Easy to use. Easy to store. Protects the contents. Provides security for the contents.||NONE|
Protecting supplies means being able to have packaging that is easy to use, economical and that the end user will find easy to use. Shrink wrap was a long held favorite but in cases where pulling out parts or supplies from the pallet is warranted shrink wrap is not the answer. Once the shrink wrap is removed it cannot be reused.
Wrapping and unwrapping palettes from their shrink wrap cover can be time consuming and costly. In addition shrink wrap does prevent spillage to a certain degree but it does not provide any security for the contents nor does it provide any stability.
Pallet walls are a better option than shrink wrap for reducing risk to supplies but they have their own set of issues that are primarily relative to their inability to be adjusted. Pallet walls can be flexible but they are not adjustable. They also require tools to assemble and disassemble which can be bothersome, time consuming and increase injury risk.
Pallet collars are the ideal solution for protecting supplies. They are height adjustable which means that you can craft protection for a full range of goods without giving up precious space. This customizable option should be a part of any enterprises risk management plan.
Container security is one of the quickest ways to reduce breakage, spillage and pilferage. Pallet collars help to reduce all three factors. They are ideal for both ends of the supply chain. These wooden collars can fold flat for easy storage and can be reused many times over.
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Cost Effective Protection
There are plenty of ways to reduce risk for supplies that the enterprise can engage but cost effectiveness is paramount in most supply chains so while there is plenty of good advice of how to institute monitoring programs and engage certain activities to help to protect the supplies the reality is that some of the solutions are cost prohibitive and are just not realistic for many organizations.
Typically mid-sized groups have to be conscious of the most cost effective options. For many mid-sized and smaller groups cost is the most important part of finding solutions, going to outside groups for consultation is just not in the cards because of the cost.
Much of the activities can be done by forming a small group of member employees that are “experts” in their area of logistics with tasks for monitoring and review assigned to each member. Cost savings can easily be achieved by focusing on the organizations strong points and building on those points.
Choosing the right packaging material is also a large cost savings and protection measure. Providing protection for supplies does not have to be a huge investment to get a nice return on the time that you invest.
Protecting supplies from damage and pilferage is one of the most important parts of the supply chain functions but it does not have to be one of the most expensive parts. With the right planning and the right tools you do not have to be concerned with the costs.
Return on Investment
ROI – return on investment – can be realized in increased production and minimal losses. It is true that supplies and inventory is one of the greatest assets of any enterprise. Protecting supplies in and of itself is an activity that will give you a great deal of return by keeping your supplies in good condition which of course reduces the need to spend on more inventory.
Overall the return on investment is multiple. Less waste, less expense and a smoother running operation.