Understanding Supply Chain Risk Management: Software & More

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Understanding Supply Chain Risk Management: Software & More

When venturing global manufacturing waters, an effective supply chain risk management software will keep unexpected storms from sinking your business

Testing, inspection and certification (TIC) concerns are especially vulnerable to unknown supply chain risks without reinforcement provided by an end-to-end quality and compliance management platform. 

In this article, we'll explain what supply chain risk management is, what makes your company vulnerable to supply chain disruption, and how a supply chain risk management software can be helpful.

What is Supply Chain Risk Management?

Supply chain risk management (SCRM) is a process of identifying, assessing, and mitigating risks throughout your entire supply chain.

When carried out properly, the first supplier in your chain will receive the same level of scrutiny from inspectors as the last supplier in your chain.

Supply chain risk management covers an enormous range of critical concerns, including:

  • Financial and reputational risk assessment
  • Quality Assurance (QA) and Quality Control (QC) compliance
  • Factory health and safety standards
  • Raw material sourcing ethics and regional practices


Perhaps these various risks can appear to be too daunting without the right guidance. However, with the application of the right tools and an organized online toolbox, these risks can be properly mitigated. 

Furthermore, when you can also provide TIC training to your suppliers, vendors, manufacturers and warehousers, risk can be anticipated early enough for improvements to be made across your supply chain. 

What the Supply Chain Risk Management Process Entails

Risk Identification

Risk identification involves quality checks and inspections of your entire supply chain.

For example, raw material will be analyzed by their material quality as well as their sourcing methods to ensure that suppliers are following your quality specifications and ethical guidelines. 

Inspectors will establish a risk profile for each of your supply chain affiliates. Then, they'll update these profiles as is appropriate.

Risk Assessment

During the risk assessment stage, supply chain profiles come under more intense scrutiny.

Via comprehensive, data-driven reports, you’ll come to know:

  • Which of your suppliers poses the most risk to your business
  • Which are the most likely to fall victim to a risk event

The reports that you receive will detail certain key points, such as what a risk event (affiliated with the applicable partner) could do to your business’s margins, sales, and profits.

Mitigation

In the risk mitigation stage, you work with the upper-management in your business to create a risk action plan. During this stage, you’ll need to ask yourself:

  • What steps can the business take to continue safely working with this supply chain?
  • What changes can be made to production to eliminate potential risks?
  • Who can the business reach out to for help creating a preventative action and risk action plan?

Without real visibility across your supply chain, the answers to these questions can be too difficult to obtain. That is why supply chain risk management software is beneficial to your fact finding and risk mitigation. 

  • Integration, data sharing and effortless communication is the fastest way to provide answers to your risk assessment questions.

How Transparency Reduces Supply Chain Disruption

The importance of transparency in any risk mitigation plan is best illustrated with a simple example:

Supply chain disruption happens when it is discovered too late that your product is being contaminated by hazardous substances. 

Supply chain protection can happen when responsible managers can monitor QC inspections, in real-time, through a shared platform, and the contamination can be dealt with at the beginning of production.

Finally, supply chain improvement will happen when consolidated inspection reports reveal a historical pattern of non-compliance by the factory, and you are compelled to find a motivated factory willing to work up to your standards. 

Whether supply chain risks involve factories of questionable manufacturing practices, or raw materials of unknown origin, your company’s vulnerability to disruption ultimately boils down to a lack of visibility.

How to Better Manage Supply Chain Risk

Once again, the importance of achieving supply chain visibility cannot be understated. 

And with the application of an end-to-end quality and compliance platform designed with your TIC concerns in mind, you can clearly see how your supply chain is operating, both on an individual level and as a whole. 

Furthermore, once you’ve achieved an initial level of visibility, you can begin to target high-risk areas before they become unmanageable disasters.

By using proactive tools such as standardized, easy-to-follow and product-specific inspection templates created by industry experts, data reports will be more valid and comparable factory to factory. 

And when inspection reports are consolidated into one dashboard file, no fail reports will go unnoticed. 

Additionally, automated data analysis will present a quantitative history of factory compliance, such as Acceptable Quality Limit (AQL) percentages and even the number of factory audit non-compliances detected. 

Once you have a clear picture like this, you can begin to take proactive measures to protect your supply chain--and your brand reputation--from risks unmanageable in the dark.

Why Do You Need Supply Chain Risk Management Software?

Companies that have already made the switch--from scattered excel documents and siloed management systems--to integrated, cloud-based platforms are not turning back. If they did, it would feel like chiselling reports into stone. 

Supply chain risk management software provides many advantages, including:

  • Constant monitoring of risk percentages throughout your supply chain
  • Accurate, real-time reporting by inspectors using customized inspection workflows
  • Training tools to help your supply chain achieve higher production standards 

QIMAone and Supply Chain Risk Management Software for Your Business

Every business faces risk. QIMAone quality and compliance software is a platform designed to help companies detect and mitigate QC and ethical risks at every step of production. 

We provide a dynamic, yet easy-to-follow dashboard so you can organize inspection assignments, workflows, data collection and risk analysis. 

Additionally, with the resources and experience compiled after 15 years of TIC service experience, we can make standardized inspection templates and useful training tools available to all in-house inspectors and managers.

Giving your team greater control over inspection management software can save additional time and money on hiring third-party outfits to carry out routine inspections.

With the right tools, you can mitigate risk, establish stronger working partnerships and improve their quality productivity, as well as your product!


Want to see how it works?

Learn more about QIMAone applications by scheduling a demo today.

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