Everyone's comfortable with a different amount of risk. Some of us really like to throw the dice while others of us keep those little red cubes tightly clutched in our palms. And depending on the situation, our risk aversion can fluctuate substantially. When the stakes are high, like wearing a seatbelt, we make sure to buckle up tight. When the stakes are low, like jumping over a puddle, we let loose and go airborne. Well, one area many procurement professionals could use some help "buckling up" is mitigating risk in the supply chain. And this needs to be addressed at the onset of the relationship with the supplier, otherwise it may be too late to tame once all the wheels are in motion.
Avoiding sourcing disruptions is climbing up the priority charts for manufacturers across the board. Miscalculating risk and not having proper contingency plans in place can cripple your company's bottom line. Having a firm grasp of sometimes forgotten aspects like logistics, insurance policies and what's currently transpiring in the countries involved will help enhance your chances of keeping the chain intact. You may think you have a good handle on factors such as diversification, but what if your suppliers are relying on the same sources to fill your orders? Even though there are many factors and other people affecting what gets delivered, the performance and quality of your supply ultimately resides in your hands.