Why We Need Supply Chain Risk Management
It’s no secret that Covid-19 has impacted most sectors across the world and ship chandling is no exception. Indeed, the coronavirus helped identify many vulnerabilities and weaknesses but supply chain risk management goes beyond that.
Ship suppliers face challenges every day from shipping delays and theft to natural disasters, changing consumer trends and even cybersecurity. Successfully navigating the world of maritime service is challenging but having a sound supply chain strategy in place can help tremendously.
What Is A Supply Chain Risk Management Strategy?
In the marine service sector, few things are more important than a supply chain risk management plan. This can be defined as a strategy to speed up the response to unforeseen circumstances to minimize disruptions to the supply chain process as much as possible.
To get ahead of potential disruptions, you should know which of the supply chain risk factors you are susceptible to. Familiarising yourself with potential issues puts you in a better position to implement the right supply chain risk management strategy.
While the most common disruptions in ship chandling include natural disasters, theft, delays or production interruptions, you should also keep in mind some of the less prominent risks. These can be equally destructive and include changing market conditions, competitors gaining traction, operating at lower costs and evolving consumer behaviour and preferences.
How To Minimise Supply Chain Risk
As we’ve discovered, there are many risks involved for ship chandlers but there are ways to minimise the supply chain impact. The PPRR risk management model is a good example, involving the following:
- Prevention – Take precautionary measures
- Preparedness – Develop and implement a contingency plan
- Response – Execute your contingency plan to reduce the impact of disruption
- Recovery – Resume operations and go ‘back to normal’ as soon as possible
While you can’t stop a natural disaster, you can certainly put certain measures in place to minimise the potential impact. The same applies to insolvent suppliers or delays. Supply chain risk assessment software can help you take a proactive approach to risk management. It provides you with greater visibility into the current structure of your supply chain while identifying any weak points and how to improve them.
Ship suppliers should develop a contingency plan and move from a single source to a multi-sourcing supply chain model is a great way to prepare for the future. When it comes to climate-related environmental risks, stockpiling products during certain high-risk seasons is advisable. You could also find suppliers and distributors closer to your base of operations and the endpoint of your supply chain.
The Importance Of Managing Freight And Logistics
A critical component within supply chain risk management is to analyse transportation and routes as freight is vulnerable to all kinds of risks. From weather-related events to infrastructure disruptions, assessing shipping risks should be the first step followed by quantifying those risks. By assigning number values you make the data more useful so it can be analysed to put effective contingencies in place.
Technology has come a long way and today the capability is even greater. Using the right supply chain management software, you can continually pull large amounts of data from multiple sources in real-time. From there, you can visually present findings to give companies a better, more detailed overview. This includes important elements such as the probability of risks during every leg of the journey, the severity of each and how to manage it.
Using Data To Manage Ship Chandling Supply Chain
Data can also be customised to answer specific questions while identifying current and potential issues. Have a look at these example questions to consider in ship chandling.
- What risks are present for each shipment from packing marine engine parts, safety equipment or food and beverages onto delivery vehicles, trains, aeroplanes or ships until they reach the final destination?
- What are the chances of those risks impacting the process?
- How could they disrupt the supply chain?
- How are you going to respond in every scenario?
If you have the right data at the right time, people can make better choices. Regardless of the type of supply chain, ship chandlers can avoid or at least minimise most risks. With sufficient data and a supply chain risk management plan in place, ship suppliers and anyone in the maritime service sector can benefit. It will help save costs in the long-run while ensuring on-time delivery.
Link Ship Chandler is an expert Maritime and Offshore Gas and Oil Rig Procurement Company supplying provisions, equipment and parts to marine vessels. This includes safety gear, office supplies, medical supplies, food and beverages. For more information about ship supplies, products or services, contact the Link Ship Chandler team on the website.