4 step guide to risk management in a global supply chain

A Four-Step Guide to Global Supply Chain Visibility and Risk Management

Recent events likely have affected your global supply chain – but you’re not alone. Almost every industry and business is struggling with one or both of these scenarios:

The inability to get the raw materials needed to create products
An overabundance of products gathering dust due to decreased demand

No matter which scenario your business is facing, it’s likely affecting your bottom line. Whether it’s changes to profits and losses, erosion of margin, or difficulty managing working capital, you need the ability to handle uncertainty.

Crowe can help you manage these challenges and enable proactive decision-making. Keep reading to learn our four-step guide to global supply chain visibility and risk management.

1. Assess your global supply chain

First, it’s important to know where and how your global supply chain and margin have been affected. Here are the actions you can take:

Segment and risk rank your supplier base by considering key factors, including contributed revenue, country, and product line.
Identify those suppliers that are affected by volume changes, both increases and decreases.
Develop risk mitigation plans and actions for working with high-risk suppliers.

2. Strategize a global supply chain risk management plan

Once you’ve assessed your situation, it’s time to develop a global supply chain risk management plan. Consider taking these steps to monitor and lessen the impact of a disruption:

Understand any potential impacts to high-risk products, including supplier overlaps, the supplier’s financial viability, and country or political risk.
Define key risk performance measures to monitor for suppliers that are defined as high risk or critical.
Determine which key contract and service-level agreements might be affected by changes in volume and demand.
Identify necessary action items during a disruption, making sure to consider different types and categories of disruptions.
Understand if technology could support risk monitoring and what supplier data you need to implement that technology.
Implement the right technology to support risk monitoring.

3. Execute on a risk management plan

Next, you need to introduce the new plan to your organization. Here are some tips on how to execute your new strategy effectively:

Encourage organizational support of plans and needed changes. You need to have support from leadership, as well as each department, to execute across the organization.
Drive the “heavy lifting” while managing unintended impacts. Although challenges may surface along the way, make sure they don’t derail your overall goal.
Implement processes with metrics to sustain benefits. The more you can prove that what you’re doing is working, the better chance that your organization will continue to implement changes.
Deploy proactive processes for supply chain resiliency and visibility. It’s not enough to react to events; you need to go on the offensive and make sure you’re prepared for any future disruptions. You must know your downstream supply chain and where you are vulnerable.

4. Optimize your supply chain risk management plan

There is always room for improvement or changes once you set the plan into motion. These tips below can help you optimize your supply chain risk management plan:

Plan for future improvement, including identifying resources and developing strategies.
Monitor and develop change management activities and procedures – updating them regularly based on current circumstances and past outcomes.
Use supplier changes to develop or update a business continuity management plan.
Provide visibility to the plan and consider the impact throughout your global supply chain.

Need help managing your supply chain risk? Crowe specialists are here to help.

With this four-step risk management plan, you can both manage the challenges of today and effectively plan for next time. If you’re looking for more assistance with global supply chain visibility and risk management, Crowe can help. Our supply chain specialists offer decades of expertise and can help design a program specific to your organization.

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