Managing Supply Chain Risks in Materials Management

/ By DSI Marketing TeamApril 14, 2023

Having a close insight into the processes that make up the supply chain is a critical component for any organization. The supply chain is where the majority of expenditure occurs. When the right decisions are made, and effective processes are put into place, any organization can find great success simply from an effective materials management process.

The supply chain serves as an organization's foundation. When this foundation is weakened, the rest of the business may drastically suffer. This can include bottlenecked processes, inability to complete tasks, lowered productivity, and a range of other potential drawbacks.

Having a strong foundation allows the organization to use this as a stepping stone toward clearer decision-making as well as have a better grasp on tasks that may need to be completed.

An Insight Into Materials Management

Materials management is a process that is used directly within the supply chain and all facets that revolve around it. Materials management serves as a way to strengthen this crucial role whilst also providing the organization with a range of potential benefits. Having a good materials management process allows the business to reap benefits such as:

  • Increased efficiency
  • Boosted productivity
  • Streamlined processes
  • Lowered risk of bottlenecking
  • Higher quality of service

These are all benefits that aim to ensure that the organization succeeds. With the right assistance and the right managerial decisions within the supply chain, these benefits can quickly strengthen the rest of the organizational processes across the board.

Definition of Supply Chain Risk Management

Risk management is a key component of any business or organization. Being able to identify negative impacts before they arise ensures that the business makes smart decisions that benefit its processes.

Risks may come in many different forms, and a good materials management process is able to identify these risks, forecast outcomes, pinpoint market trends, and provide actionable solutions to combat these issues.

With the proper risk management procedures, a business can find a great deal of success within its day-to-day processes because of the minimized detriments and potential business impacts that occur.

Identifying Supply Chain Risks

The supply chain is an everchanging and ever-evolving landscape that requires close analysis and clear decision-making.

Since the supply chain forms a large portion of any organization, it is essential to always maintain a close watch on its ongoing processes to ensure that business risks are minimized and processes are streamlined.

Let's have a closer look at some of the risks that may occur within the supply chain.

Raw Materials Risks

Raw materials are what businesses and organizations use to go about their daily activities. Without the necessary amount of high-quality materials present, a business can suffer greatly. Having a trusted key supplier is crucial in receiving the necessary raw materials for any given task.

A trusted supplier should provide your business or organization with raw materials that fulfill three criteria: quality, quantity, and competitive pricing. Supplier risk management is a process that should be carefully monitored.

This is a careful balancing act that requires clear communication between the business or organization and the supplier. When raw materials are of a lower quality, this can decrease customer satisfaction, slow down various processes within the business, and require a large amount of unnecessary expenditure and financial impact.

When the raw materials are high-quality but in low quantity, the business may suffer due to the lack of resources available. This means that financial risk is increased and production is halted until raw materials are acquired.

A non-trusted supplier may also provide your business or organization with defective materials that could severely impact the undertaking of tasks. When partnering with the right supplier, it is crucial to maintain a good supplier relationship with them and their service.

This ensures that products are of the highest possible quality, in a sufficient quantity, and at pricing that the business can afford.

Disruptions in the Supply Chain

Supply chain disruptions may come in various different forms and may affect the entire supply chain. This can be due to faulty equipment, lack of resources, decreased efficiency in tasks, and lowered morale of staff.

When materials management is effectively implemented in a business or organization, it allows the entity to have a closer and more thorough look at the ongoing processes within the supply chain.

Being able to identify risks and create actionable problems before they affect the health of the business is an essential step in finding operational success.

Ways to Mitigate Risks in Material Management

There are many different ways to go about the mitigation of risks within the supply chain. An effective materials management process is able to identify these business risks and plot a course toward a solution that is beneficial for the entity.

Let's have a closer look at some of the supply chain risk management strategies that your business can implement

Secure Supply Chain Operations

Securing the supply chain is an effective strategy ensuring that the various factors that interact with the supply chain are maintained and consistently stable.

This can come in the form of bolstering relationships with suppliers, increasing staff morale, bettering inventory management and storage systems, and having better systems in place to regulate and maintain the constant flow of supplies.

Strengthen Business Continuity Plans

Business continuity plans refer to the action plan that allows a business to continue operations. The supply chain plays a massive role in this factor. Having a stable and secure supply chain is the first step toward strengthening the business's continuity plan.

This may come in the form of adapting the original business action plan to be orientated around a stable and secure supply chain from which business operations can function.

Consult Services to Help Your Organizations Develop Resilience

Identifying potential risks within the business's structure and supply chain can be difficult. Not many businesses are equipped with the tools and knowledge to accurately identify these unknown risks as they arise.

Receiving professional assistance from our team is a great means of ensuring that your materials management process is efficient and thorough.

Let Distribution Systems International Assist You in Mitigating Supply Chain Risks in Materials Management

Whether it's disruptions caused by natural disasters, geopolitical issues, or other unforeseen circumstances, supply chain risks can have serious consequences for healthcare materials management operations. 

At Distribution Systems International, we understand the importance of mitigating these risks to ensure that your organization can continue to provide the best possible care for your patients.

By partnering with us, you'll gain access to our years of experience and expertise in managing healthcare supply chains. We'll work closely with you to come up with sound risk management and develop effective strategies to mitigate them, ensuring that your operations remain stable and efficient even in the face of unexpected challenges.

Don't wait until a supply chain disruption puts your organization at risk. Reach out to our team and let us help you mitigate supply chain risks in materials management, so you can focus on what matters most, providing high-quality care to your patients.

To get started, contact us at 800-393-6090 at Distribution Systems International today!

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