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 Christmas tree 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 labelling or other aspects. Likewise, an organisation may provide the workforce to deliver a service, but use a third-party credit processing company, which, 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, emphasising 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: