Supply Chain Risk Management Software

Importance of Supply Chain Risk Management Software

For many organizations, globalization, outsourcing, and extended supply chains are effective strategies to increase efficiency and achieve economies of scale. However, these benefits are accompanied by significant increased risk to quality, safety, business continuity, reputation, and more. Commitment to and practice of effective supply-chain risk management (SCRM) is now essential to running a successful and sustainable business.

Avetta helps the world's leading organizations identify and manage risk in their supply chains through:

Our cloud-based technology and expert insight help mitigate risk and enable sustainable business growth with global supply chain risk management capacities.

Identifying Risk in the Supply Chain

Organizations are always at risk for losses through cost volatility, supply disruption, non-compliance fines, and safety incidents that cause damage to their brand and reputation. Knowing what’s at stake is the first step to understanding, measuring, and managing risk in your supply chain.

Avetta’s supply chain risk management solutions help you identify supply chain risk, document risk factors, and manage risk. For example, do your suppliers have the proper insurance? What is their record for safety, sustainability, and quality assurance?

Identifying supply chain risk might be split between several departments, such as operations, procurement, risk management, health and safety, and compliance. Our supply chain risk management solutions give you a central repository for certificates of insurance, audit reports, safety records, and records documenting the qualifications and certifications of your suppliers and their employees.

Safety

Among the highest priorities for companies across all industries, safety concerns are often magnified in chemical, oil, and gas, construction, and manufacturing. Workplace accidents can jeopardize contracts, result in fines, and cause significant damage to a company's reputation.

Quality Control

Do your vendors and suppliers meet your standards for quality and consistency? Customers are quick to react when they percieve a drop in quality; and, even the smallest product issues can be difficult to recover from.

Financial

Any disruption to the supply chain due to financial challenges has the potential to impact business continuity and, ultimately, your bottom line. Taking a proactive approach to understanding supplier financial strength can prevent disruption and unnecessary costs.

Compliance

Are your contractors insured? Do they have the right type of insurance, the rigjt limits? Knowing this information will help you to manage insurance risk and avoid potentially costly litigation.

Reputation

Damage to a company's brand or reputation can be long lasting, extremely costly, and sometimes unrecoverable. Committing to a supply chain risk management strategy can not only prevent brand damage but can also serve to foster new partnerships with organizations that share like values.

Sustainability

It's no longer enough to assess risk within the traditional construct of a supply chain. Organizations must look beyond and consider environmental impacts and social responsibility, including adherence to labor laws and sustainable practices.

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Mitigating Risk in the Supply Chain

Effective supply chain risk management methods start with the procurement process and are dependent on having an effective methodology for evaluation. Part of Avetta’s supply chain risk management process is having a central repository where all departments dealing with the supply chain can deposit their reports, certificates of insurance, and other documents—and see the documents from other departments. When managing contractor and supplier relationships, loss control or risk mitigation is most effective when you can Communicate, Evaluate, Select, and Monitor:

Communicate

Communicate expectations. Before you award the contract, ensure that you detail safety expectations in your contract with the supplier or contractor in mind.

Evaluate

Evaluate progress. Use objective criteria and both leading and lagging indicators, like Experience Modification Rate (EMR) and Total Recordable Incident Rates (TRIR) to determine how the contractor’s performance is measuring up to stated expectations.

Select

Select contractors based on qualification standards. Once you have established the criteria against which contractors will be evaluated, be clear that all elements of qualification will be weighted and that price is not the only factor on which they will be judged.

Monitor

Monitor contractors using a real-time database. Enforce company-wide standards by keeping a database of all contractors in a regularly updated format.