Experts from J.P. Morgan offer Supply Chain tips
Business is all about risk and unpredictability. The global trade management experts at J.P. Morgan offer some tips to importers and exporters to prepare better for natural disasters, port strikes, and other factors beyond their control and to decide what emergency planning considerations should be in place to better ensure that a company’s supply chains operate in tough times. Some of the suggestions from these experts include:
In making your initial sourcing and fulfillment decisions, certain risk items should be considered. These include political risks of the country, physical and geographic risks like availability and proximity of primary and alternative logistics networks for all modes, historic weather/natural disasters, labor union action and so on and also economic and market risks like fuel prices, currency exchange and inflation.
Ensure that there is efficient communication throughout the supply chain among the team members who are responsible for the decision making during a crisis.
Keep alternatives open. Use the services of multiple carriers at all times who use different ports of dispatch. Have the ability to diversify transportation. Transportation routes may be disrupted so it is important to have alternate means of transportation.
Keep a track of and constantly monitor each country/region for threats and trends which will impact your supply chain: Weather, port and transportation strikes, fuel prices, currency exchange, inflation, labor rates, pending legislation (i.e., trade sanctions, quotas, anti-dumping duties, Free Trade Programs), political elections that may alter the country’s view of trade.
Keep your supply chain flexible so that it not only has the capacity to keep up with a large increase in demand, but also that the pipeline can be slowed down in case of demand drop to avoid a build up of unnecessary inventory.
Have a solid cross-trained workforce that can react fast. If part of your supply chain is directly affected by the disaster, it is important to have people that can keep the operation running as best as possible.
Keep a backup of all trade-related documentation in electronic format somewhere offsite. If all records are lost in the actual site, they are easily and readily obtained from a different location.
Conduct a risk assessment of your existing supply chain. If you are uncertain as to how your supply chain will hold up in times of trouble, hire outside global trade experts to assess risk and help strengthen your supply chain.
These tips are very helpful in increasing the productivity of supply chains and making them more adaptive to changing times.
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