The performance of a manufacturing company’s supply chain is paramount to its revenues and profitability. The quicker a business can introduce a product to the market, with the fewest issues possible, the less it will spend on the process and increase its chances of success.
Such goals are upheld through a supply chain management program. Still, there are numerous factors that can delay the process, or worse, bring it to a screeching halt. That presents the company with serious implications in terms of its ability to turn a profit.
However, the more a firm understands about risks to its supply chain, the better prepared it can be to deal with issues and resolve them in a timely manner. What should you be on the look out for?
1. Natural disasters
If 2011 has taught logistics managers anything it’s that natural disasters can have an overwhelmingly negative effect on the supply chain.
The Thailand floods, for example. The Southeast Asia nation serves as a hub of manufacturing for computer hard disk drives, accounting for about 25 percent of the world’s output. And because many plants were essentially wiped out by flooding, analysts slashed their outlook for PC sales in 2012.
2. Financial issues
The importing and exporting of goods are essential aspects of many supply chains. Companies often look overseas for inexpensive products and labour in order to cut the costs needed to build a product.
However, the cost of doing such business can change with political and government influence. This is most common in the form of tariffs. Companies will want to be sure they are prepared for any sudden change in fees and taxes they must pay.
3. Product quality
Getting a product to market as quickly as possible is all well and good, but only if the utmost in quality standards are upheld. Customers will turn on an organisation that pumps out poorly made products.
The high quality throughout the supply chain can be achieved through greater collaboration among the company and its suppliers and vendors. Working together will foster a strong relationship, experts say, and get both sides working toward the same goal of practicing a highly effective supply chain.
ISO:9001 Quality Management System relates to quality management systems designed to help organisations ensure they meet the needs of customers and other stakeholders. The standards are published by ISO, the International Organisation for Standardisation and available through IMSM and independently certified. With over a million companies worldwide adopting ISO:9001Quality Management Standard actively using it daily as their quality management system we can all potentially look to a future where there are less recalls of products and companies delivering to customers “what they say on the tin,” every time, all the time.