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1 . Thoroughly audit your supply chain The first step for organisations is to ensure that they are managing the risks beyond their own operations . Just because you ’ ve outsourced the process , it doesn ’ t mean you ’ ve outsourced the risk . For instance , a European based company could still be vulnerable to business interruption from a typhoon in the Philippines if one of its key suppliers is located there .
A wise rule for companies to follow is to work with their full network of suppliers to ensure that the right loss prevention procedures have been implemented . Companies that don ’ t develop relationships with suppliers will often find themselves becoming unstuck by severe supply chain disruption .
One step that companies can take to protect themselves from supply chain disruption is to audit all their business relationships and build a network of preferred and alternate suppliers with contrasting risk profiles . For instance , never have both a preferred and alternate supplier that are vulnerable to the same flood loss . Having alternate relationships ( with alternate risk profiles ) will ensure that a company is never too reliant on a single supplier .
Businesses should also be aware that their own risk prevention strategies would be scrutinised by other members of the supply chain ecosystem . Therefore , it is important to map your position in the supply chain hierarchy and proactively communicate your business continuity plan to all relevant parties .
30 October 2016