Which External Factors Most Commonly Affect Your Supply Chain?


If you work in logistics, you know that your supply chain is like a machine with many cogs. As efficient as the chain can be when working properly, one wrench thrown into the works can cause massive delays and problems.

Identifying supply chain risks and developing methods to combat them is the best way to avoid disruptions in your daily business. To establish responsible risk management, suppliers must be able to mitigate certain risk factors.

Are you concerned about possible disruptions in your supply chain slowing down your efficiency? Read on to discover potential pitfalls you need to plan for.

Accuracy of Shipments and Delivery Availability

Once you’ve established suppliers, you need to know they can deliver with consistency. Their reliability is key to assessing any supply chain risks they pose.

Sometimes suppliers suffer interruptions in raw materials or parts availability. This can cause an interruption in product flow. Good suppliers partner with reliable suppliers of their own materials.

It is wise to confirm shipment times and frequency, transportation methods, and rerouting standards due to weather. Knowing the supplier’s procedures is crucial to maintaining supply integrity.

Does your supplier ship daily or weekly? Do they use ground or air transport? This information can help you plan for increases in demand and any other needed changes.

Do you know where your product is at all times? Maintaining accurate shipment tracking can keep you on top of any potential issues.

Environmental Risks

These risks are often the hardest to control. The geography of your supply chain can mean dealing with economic, social, and governmental factors. Local laws, threats of terrorism, political changes, and economic flux can all trickle down into your supply flow.

In addition, weather patterns and climate can have a constantly changing impact on your supply availability. While you can’t control the weather, you can invest resources to stay on top of any potential delays.

Business Changes

Much like any business, suppliers can suffer instability through financial or managerial upsets. These hardships can mean supply interruption.

A supplier could be unable to deliver on goods because their business is being sold. Perhaps a financial shortfall makes them unable to produce a product. In the worst cases, these setbacks may mean seeking out a new supplier or negotiating new terms

Facility Risks

The facilities of your suppliers can cause issues if they are ever cited for regulatory violations. If suppliers do not maintain compliance with local rules and laws, their abilities to process shipments may suffer as they work to correct these missteps.

Physical security of their location is also important. Do your partners have appropriate security and storage measures in their facilities? Those without could suffer theft, damage, loss, and more.

A facility that is out of date, in disrepair, or understaffed may not have the capacity to process increases in demand.

Mitigate Your Supply Chain Risks

While external factors create supply chain risks that are outside of your control, a solid plan can help head off any issues before they start.

Working to identify and minimize your greatest risks will keep you from suffering losses when upsets do occur. There are many tools available which can boost your supply chain visibility and help you forecast any possible delays before they happen.

If you’re looking for logistical solutions that will keep you ahead of the curve, try ODYN today. Our analytics platform can help you maintain the integrity of your shipments and optimize your shipment tracking for maximum visibility from end to end.

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