A supply chain can make or break your business. In eCommerce, for example, slow delivery of products is one of the most important growth barriers that often lead to being outcompeted. In fact, it’s also in the top five reasons why people choose to abandon a product in the shopping cart in an online store. More factors like sustainability, human rights, and anti-corruption measures also impact a business’s bottom line. If a supply chain policy doesn’t address these, the chance that some of them will cause great damage to the company’s reputation and profits increases.
That’s why you need to consider these and other important things before creating a supply chain policy for your business. In this post, find five critical factors to consider before developing the supply chain policy.
Why Blockchain will Create Extreme Supply Chain Management OptimizationGrab Your Free Copy Today Download WhitePaper
1. The Structure of the Existing Supply Chain
The supply chain policy should accurately represent your company’s capabilities. It needs to be written only when you have a good understanding of the supply chain, its advantages, risk factors, depth, and breadth.
That’s why you should assess the supply chain before writing a policy to manage it. Run an analysis of its depth and breadth, which allows to map its levels, locations of main suppliers and secondary suppliers as well as their roles in the overall chain.
If your organization is a part of a larger company, evaluate your position in its supply chain management plan. There are many legislative, regulatory, and organizational obligations that may exist as a result of your partnership with that company, so you need to be aware of them.
That’s why conducting an audit of the larger supply chain is a must to understand your role, risks, and capabilities.
2. Address all Issues Impacting Your Supply Chain
The list of international instruments, market standards, and potential issues affecting your supply chain is quite extensive. Here are some of the most important ones to include:
- your industry standards for supply chain management
- environmental protection standards and regulations
- issues that could arise as a result of breaking the supplier code of conduct or procurement
- the regulations of the UN on business and human rights
- any relevant standards and initiatives that prevail your domestic supply chain regulations and social responsibility policy
- supplier’s code of conduct
- working standards and prevention of harassment and discrimination
- market updates (LTL, truckload, ports, cross-border, etc.).
Your understanding of each of these factors defines how well your supply chain policy will be successful in addressing them.
This means a whole lot of research, writing, and analysis.
If you don’t have in-house researchers to provide that, you can delegate this task to professional industry researchers from BestEssayEducation and SupremeDissertations. They can provide reports on industry standards, regulations, and help with researching other sources. In case you need to share these with others, Grammarly and GrabMyEssay can be used for editing.
3. Evaluate Your Company’s Ability to Address Issues
Clearly, you’ve got a lot of factors to evaluate before writing a draft for the supply chain policy. Your company needs to be prepared to address each of them should any rise, so the next step to take is to define if you have policies for that.
If you did your homework with identifying and assessing the issues described in the previous step, then you should have an extensive list on your hands. Now, you need to go through each item and decide if there are any policies and procedures to address them.
“At this point, you’re going to ask yourself a whole lot of questions,” shares Keith Lee, a business writer at TrustMyPaper. “Answering all of them might seem like a daunting task, but it’s a must for creating an effective supply chain policy.”
Here are some of the questions you’ll have to address, as suggested by Lee.
- Do you have a policy against workplace discrimination?
- Do your suppliers meet the latest social and environmental standards?
- Do you know who’s responsible for monitoring supplier-related activities such as procurement?
Remember, answering them in great detail is very important because the answers will be immensely helpful to create a clear policy.
Know more: How to Protect Your High Value/High Risk Cargo.
4. Research and Define all Supply Chain Risks
The risk factors affecting your company’s logistics should be a separate section in your supply chain policy. Defining as many of them as possible requires a good understanding of the supply chain operations.
Some of the most important risks relate to:
- financial risks, e.g. the financial condition and location of suppliers and secondary suppliers
- legal risks, or those related to governmental laws and regulations in countries where you operate
- environmental risks relating to the impact of suppliers and contractors on the water, soil, air, and emissions
- personnel risks, e.g. a high percentage of low-skilled employees in the supply chain
- relationship risks that may arise as a result of issues between your company and suppliers, consultants, agents, and other third-parties
- COVID-19 pandemic-related risks. Food supply chain supply chains are at increased risk due to an ongoing pandemic of the novel coronavirus. This makes the readiness and capabilities of partners a major consideration.
Having logistics partners that can provide reliable supply chain solutions and understand the risks is essential to assist you with minimizing disruptive risks and maximizing shipping times.Listen to “Data Driven Shipping is How Shippers Gain "Shipper of Choice" Status” on Spreaker.
5. Monitor how Suppliers Adhere to the Policy
When your supply chain policy is completed, suppliers will need to follow its instructions. But how exactly are you going to ensure that they do? To minimize the risk of suppliers and partners not following the policy, develop some ways for them to report to you.
Here’s what to consider:
- think about actions you will expect from the suppliers to prove the adherence to the policy
- define how suppliers must communicate and evaluate the fulfillment of your standards and expectations
- ask the suppliers if they need some support in building the capacity to meet the standards of your policy.
Of course, your organization must also have a clear description of the steps to take in case any violations arise.
Dorian Martin is a senior search intent optimization copywriter from ClassyEssay and TopEssayWriting where he creates Google-friendly content. He has a background in marketing and blogging for business that allows him to write well-researched, easy-to-read, and optimized web content. Dorian is currently working on an expert course on blogging for small businesses that he plans to share later this year.