“Supply chains and the manufacturing industry have been on a rollercoaster ride, hit by skyrocketing prices of oil and commodities, high levels of debt, weak demand and tight credit,” said Barry Misthal, head of the global Industrial Manufacturing group for PwC, in a recent press release announcing a new report from PwC. “This report asks manufacturers if they have the right tools in place to adapt and prepare for potential future risks. The reality is many do not know who their high risk suppliers are or where the cracks and loose chinks are in their supply chains.”
Supplier performance and risk management continues to be a pressing topic for supply chain professionals, especially with the struggling economy, natural disasters, geopolitical issues and fraud risks on the rise. The most effective way to achieve a strong supplier information management program is to directly align existing suppliers with the company’s corporate goals. The company should also develop a process or system to monitor and measure their supplier performance using Key Performance Indicators (KPI’s) on regular intervals. In addition, a recent post on eSourcing Forum suggested teams break risk into six key dimensions as part of their supplier performance and risk management plan. You can read those here.
Moving forward, the report suggests focusing on these five areas of improvement during this time of economical and geopolitical uncertainty:
1. Analyzing skills and talents
2. Addressing lifecycle opportunities
3. Linking demand planning with rest of the supply chain
4. Identifying and acting on supply chain risks
5. Creating stronger collaboration between suppliers and customers to match external needs with internal culture change
“The global manufacturing industry must act now to protect and prepare their supply chain matrix against a ticking time bomb of financial instability,” warns the PwC report.