32 MiMfg Magazine January / February 2023
Premium Associate Member
Is Your Business Prepared to Face a Supply Chain Disaster ?
By Tom Shemanski • Rehmann
In early 2022 , many businesses and manufacturers faced potential workforce strikes , threatening another supply chain nightmare much like what the pandemic caused . Fortunately , normal operations resumed for most businesses but many companies were left concerned and wondering how they could lessen the blow of supply chain issues in the future . The key to ebbing potential supply chain threats , if not to avoid them altogether , is to consider supply chain management as a part of your business ’ entire risk management plan .
First , it is important to understand how supply chains can be negatively impacted . Strikes could result in a shortage of stock as the production and shipping of product would slow . Or financial instability as some businesses don ’ t have the working capital to maintain adequate inventory levels which can cause a shortage of goods . In addition , many businesses are faced with employee turnover , resulting not only in scheduling issues but in more time spent hiring and training replacements .
Whether your business is in the throes of a messy manufacturing and supply chain ordeal or worried about a future debacle , now is the time to build out a strong risk management plan that will help avoid supply chain shortages and de-escalate their effects .
The Next Best Step
Complete an internal supply chain assessment to identify where the bottlenecks are as well any other problems or potential problem areas . Assess if you have enough suppliers and if you need to diversify their geographic locations in case of natural , political or economic disaster . Look at inventory levels and consider what raw materials are crucial for production .
One of the best ways businesses can assess their supply chain is to create a strong supplier development program featuring an evaluation system . This evaluation must ask questions , including :
• Are suppliers on time ?
• Are they cost competitive ?
• Are they investing in new tech and equipment ?
Once finished , this assessment should provide your business with the information you need to fix , adjust and fill in the gaps .
Think Big Picture
There are other key business strategies to minimize supply chain risk . This can include bringing on additional capacity through equipment purchases or an acquisition of a key supplier or competitor . Also , do not forget about consistently communicating with suppliers and customers on supply chain issues and focusing on improving forecasting data used for planning .
Unsurprisingly , cybersecurity is a huge area that is overlooked ; any downtime within the IT and cybersecurity field is one step closer to a security fiasco , as your IT operations connect you to your customers , suppliers , manufacturers and internal team . Other areas like day-to-day financial operations and human resource management also tend to get bogged down and leave many businesses feeling stretched thin .
Relying on a third-party partner to provide outsourcing and risk management resources can save your business time , money and stress when supply chain issues come knocking . Suggested steps :
• Hire a 24 / 7 IT managed service provider to manage your security and protect your business from external cyber threats .
• Bring in a fractional CFO to support ERP system improvements and inventory level analysis .
• Supplement your HR department with employment enhancement projects that identify whether your business is creating the best work environment for your team .
Supply chain issues will come but your business can be prepared with the right tools and the right team behind you . Assess the problem areas , invest in the right expertise , act immediately where possible and create the ideal risk management plan that will keep your mind at ease .
Tom Shemanski , a principal with Rehmann , leads the firm ’ s manufacturing industry group and CFO services team . He serves clients in an advisory capacity , providing CFO services , business financing solutions , turnaround management , strategic planning and more . He may be reached at tom . shemanski @ rehmann . com .
Rehmann is an MMA Premium Associate Member and has been an MMA member company since July 2006 . Visit online : rehmann . com .