3 tips on recognizing continuity of operations risks in your supply chain
Small businesses can prepare for natural disasters, manmade crises and other threats with business continuity planning, but there will always be one aspect op operations outside their realm of control – the supply chain. However, this doesn't mean that firms cannot prepare for risks to supply chain continuity and establish a strong foundation for operations resumption should a natural disaster strike a distant supplier or partner.
According to GreenBiz.com, there are a steps that companies need to take in order to identify and address threats along their supply chain. These include:
- Recognize vulnerable regions: Flooding in South East Asia, typhoons in India, drought in Europe – these can all have a profound effect on small U.S. businesses that get services or supplies from these areas. It is critical for companies to research the potential threats that could affect the regions their suppliers are from before making any long-term deals and putting themselves at increased risk.
- Socio-economic challenges: Political, social and economic upheaval can also be a major risk for businesses along an international supply chain. While these challenges can be unpredictable, small businesses should assess potential risk factors in the states of any suppliers and weight them accordingly.
- Tertiary risks: Sometimes important risks to pay attention to are ones that don't even directly affect the supply chain. A rice shortage may not affect paper production in a foreign factory – but it will affect food supplies for the workers at that factory, in turn having an impact on performance.
Keeping these issues in mind can help firms optimize their business continuity plan and establish a stronger, more well-rounded supply chain that is dependable and hardened against global disaster.