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How Do You Build a More Resilient Business with Supply Chain Risk Management?

Identify. Assess. Mitigate. It’s a platitude heard often when discussing risk management in supply chains. And yet, it continues to act as an effective framework for dealing with all types of risks at all levels of your supply chain.

Risk identification determines which risk events your supply chain is most susceptible to. A risk assessment will help you predict how those risks will affect your supply chain. Mitigation, meanwhile, is how to prevent those risks from happening in the first place, and knowing how to react in the event those risks are not preventable.

So what are the risks your supply chain may be facing, and what can you do to gain and maintain a competitive advantage in the face of adverse business conditions?


When identifying and assessing your supply chain risks, potential risks generally come in 2 flavors: internal and external.


Whether your business processes are changing, your inventory is poorly managed, or you struggle to meet labor or environmental compliance standards set by local governments, internal supply chain risks are often the most frustrating to deal with because they’re the most predictable and, hence, the easiest to prevent.

Financial Risk: This could include issues like volatile markets, supplier bankruptcy, debt restructuring, or layoffs and other personnel changes.

Cybersecurity Risk: One of the most common supply chain disruptions, lack of preparation for cyber attacks can result in sensitive data loss, stolen intellectual property and, ultimately, lost revenue and profits.

Compliance Risk: Compliance issues could include socially irresponsible suppliers or partners who provide poor working conditions to workers, or engage in actions that harm your brand image.


Global supply chains are particularly vulnerable to interruptions to the flow of products due to geopolitical instability, unpredictable demand shifts, or natural disasters. External risks like these are difficult to foresee but it’s still possible to develop contingencies and emergency response plans to prevent their occurrence from doing excessive damage to your supply chain.

Geopolitical Risk: Political and social revolutions, trade wars, worker strikes and border disputes can all negatively affect the productivity of your supply chain. Carefully monitor all geographic regions you service, especially if your supply chain is global.

Natural & Man-Made Disaster Risk: Supply chain disruptions due to natural disasters and extreme weather are often unavoidable. Certain disasters, while man-made (think fires, power outages, accidental explosions, etc.), are no less devastating.


At every tier of your supply chain, from your production plants and warehouses to the transport hubs, routes and customer locations, there are plenty of things you can be doing to control risk factors and continue operating at full efficiency.

  • Guarantee compliance with government regulations. Ensure total transparency throughout the supply chain, set clear brand guidelines and stay on top of social media mentions to make sure any negative publicity is handled early and quickly.
  • Conduct audits of every node of your supply chain. This means measuring the probability, impact and current level of preparedness for the different risk types mentioned above. Create regular maintenance schedules for all equipment, vehicles and software, and provide formal classroom and on-the-job training for all WMS operators, warehouse staff and supply chain personnel who use the equipment and software.
  • Look at your suppliers’ financial history closely and carefully track their financial status throughout the year to mitigate internal financial risk.
  • Start tracking the most relevant supply chain KPIs for your business and let the data help guide your decisions.
  • Build cross-functional teams to build a risk profile and ascertain the types and levels of risk your organization can expect to face. Make sure everyone on those teams knows their role in the execution of your risk mitigation plans.
  • Diversify your suppliers without having too many in your network. Do your best to foster supplier relationships by helping them to optimize their own operations. This has a positive downstream effect that impacts every level of your chain.
  • Take advantage of advanced automation technologies like RFIDvoice picking, cloud and WMS software to automate as many stages of your supply chain as possible and centralize your workflows.
  • Emphasize and simplify cybersecurity. Every party involved in your supply chain should make a concerted effort to be open about their cybersecurity capabilities. To decrease the likelihood of data breaches and improve threat detection, adhere to industry cybersecurity standards and come up with a rapid response plan in case of attacks. Remove any proprietary data restrictions that could complicate efforts at achieving full data visibility for every tier of your supply chain.


The right supply chain management software can be used to evaluate the scope of risk and help you stay up to date with your suppliers and other components of your supply chain. A software solution with advanced analytics capabilities — like DATASCOPE WMS — will provide predictive insights about inventory levels, supply availability, and allow you to track real-time data regarding weather, traffic or other scenarios that may affect your productivity.

Choosing and implementing a new supply chain software carries with it its own risks and rewards, but the overall benefits to the continuity and sustainability of your business will be tremendous. You’ll find that your entire operation is infinitely more resilient and dynamic. The more quickly you can detect and recover from cyber attacks, weather-related disruptions or negative publicity, the more market share you’ll take from competitors and the easier it will be to meet customer demand.

Some ways to manage those software-related risks include weekly project meetings for your teams, properly training all WMS software operators, performing full inventory counts before taking your software live, and doing your best to manage customer expectations and minimize business interruptions when going live.

DATASCOPE WMS continues to invest in new software modules and features for our own solution so that it can be more easily integrated with SYSPRO ERP or other tools and systems you may be using. We also want all of our customers and partners to be able to customize and configure the software for their specific business needs.

Schedule your software demo to see why DATASCOPE WMS might be right for your supply chain optimization efforts.

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