While many consumers take for granted that products will naturally be
ready and available whenever they need them, the reality is that supply
chains are extremely fragile. Much like holiday lights that fail when a
single bulb burns out, the risk of disruption exists with every
supplier and nearly every activity at every level of the supply chain.
The supply chain itself can be made up of as few as one supplier, or
potentially thousands. For example, a pharmaceutical company may need a
third party to supply the bottles, a fourth-party supplier for
packaging, and multiple fifth-party suppliers to handle labeling or
other aspects. Likewise, an organization may provide the workforce to
deliver a service, but use a third-party credit processing company, who
in turn uses a fourth party for credit checks.
Reliable, timely delivery depends on each of these suppliers; if any
fail to deliver as expected, the desired service or product may not
reach its intended destination on time and at the right cost.
The SCRM process first identifies the parties within a supply chain,
emphasizing the most critical suppliers. These suppliers are assessed
for regulatory compliance, as are the fourth- and fifth-party suppliers
that provide them with goods and services. Each supplier is reviewed for
insights into past performance and potential risks. Any issues that are
discovered are addressed immediately and resolved as quickly as
possible. Finally, real-time dashboards and up-to-date reports allow
internal stakeholders to continue monitoring the suppliers and the
supply chain for any emerging changes.
Put more simply, the SCRM process consists of four specific steps: