How to Mitigate Risks in a Global Supply Chain
Globalization has opened many markets to faraway countries that were not viable customers for most businesses in the past. To fulfill international obligations, many businesses are now outsourcing the manufacture or assembly of parts to companies halfway around the globe. With the impediments of language, time zones, and cultural barriers, some companies are finding the risks of a global supply chain are more challenging than they first anticipated. Money saved through outsourcing may be exhausted when risks are taken into account.
Below are a few ideas on stabilizing supply lines to minimize the risks of multiple offices working separately toward a common goal.
- When bids are procured for the manufacture of a product or a component of a product, many companies choose the supplier with the lowest bid. This could lead to a poorer product if the parts used in the manufacture are not up to the standards for your corporation. A good rule of thumb is to choose two suppliers: one with a stellar reputation known to have parts on hand to fulfill your orders, and a second supplier whose products may be less expensive but with a lower volume of parts that may or may not be consistently on hand to complete each order your company places with them.
- Communication barriers along an international supply chain require more than a translator between multiple languages. Customs and business practices differ across the world, and understanding the workings of each supplier will lead to fewer misunderstandings as orders are fulfilled. While one supplier may need direct guidance, for instance, another may be insulted if a representative of your company offers to assist in the initial startup of the operation with your company.
- Suppliers in diverse areas of the world will experience markedly different environmental threats, both natural and man-made. Real-time tracking of those emergencies by a platform like NC4 Risk Center™ will give a more complete picture of where risks are occurring, show a history of where risks are more prevalent for your particular industry, and house a directory of contact information for vendors and suppliers so you can quickly contact key representatives for a complete picture of how disasters will affect their portion of the supply chain.
Acknowledging the cultural and logistical components of a global supply chain can relieve much of the anxiety for the manufacturing portion of your corporation. For safety and security solutions regarding supply chain management and risk mitigation, choose NC4 Risk Center.
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