When it comes to the supply chain, we can predict and estimate how and when things are going to happen. However, these are merely approximations as there are untold factors that could disrupt normal business proceedings and throw a proverbial wrench into the machine that is the supply chain. While there are many risks that analysts can account for - weather patterns, elections, etc. - there are others that can quickly appear and disappear, upsetting the natural order. Here are five risks that supply chain managers could encounter during their careers:
1. New technology
Business and technology are two industries that are forever tied to each other. As fresh technology emerges, the supply chain usually adopts it and optimizes it for use. Unfortunately, learning about a new gadget or software can cause delays or setbacks, which will decrease the product output for procurement services, noted TriplePundit. Eventually, as the technology becomes more commonplace, the pace will pick up, but the lost time is something that can never be returned.
2. Losing employees
As with any industry, losing employees is always a possible risk. Due to different opportunities elsewhere, retirement or other changes, the loss of a trained employee can slow down production and create a backlog in the process, asserted PropertyCasulty360. Unless there is an individual already in the company who can immediately take over the vacant position, there are likely to be extensive delays along the way.
3. Training new employees
Just as the loss of an employee can be detrimental, training a new employee takes time and resources away from regular production, reported the source. Of course, training new employees is necessary when there are empty positions to be filled, and rarely are people fully trained when they enter a new company, but the time taken is still considered a risk factor. On the bright side, the investment of time into new team members will hopefully pay off in the long run as they work with and grow within the company, increasing their value in the process.
4. Regulation changes
Following government and industry-mandated regulations is of the highest importance for the manufacturing sector. As new technologies emerge and workers' rights are amended, the regulations are bound to change as well. TriplePundit pointed out that suppliers need to accommodate the changes immediately, and the updates are likely to cause delays. Adhering to new standards will take some time, and this constitutes an unfortunate, however necessary, risk that could appear at any moment.
5. Labor union issues
Similarly to regulation changes, when unions dispute and slowdowns come into play, there is very little that businesses can do in the interim, noted PC360. If the shipping union is on strike, manufacturers and procurement specialists have their hands tied in terms of how they are able to move their products. Companies need to be prepared for interruptions lasting anywhere from a few days to even a few months. Until the unions can settle their differences, the other members of the supply chain need to wait patiently for issues to blow over.
While it is possible that a single supply chain may not encounter any of these examples in a given fiscal year, there are many other problems that could rear their heads and create some trouble for industries across the board. The main point for businesses to remember is that there is no such thing as over-preparing for the worst. If the best offense is a good defense in sports, then this certainly applies to the supply chain game.