Supply chains involve many stakeholders, both internal and external. Internal departments involved in supply chain activities include finance, procurement, risk and compliance, customer and supplier relationship management, and manufacturing. External partners might include a range of suppliers, distributors, carriers, logistics providers, sub-contractors, and customers.
Each of these internal and external parties may use their own, disparate, IT solutions. This presents a significant hurdle for companies looking to optimize their supply chain operations.
This could be operational, including issues such as managing inbound, outbound, returns, and so forth. It could also be strategic, such as evaluating how operational changes might cut costs or improve customer service.
By deploying supply chain risk management software, companies can connect the dots. This allows companies to monitor their supply chain, and leverage prescriptive recommendations based on predicted risk at every step.
A Look Inside How Supply Chain Risk Management Software Works
The basis of supply chain risk management technology is cloud-based software. This software combines multiple sources of data from different supply chain participants. Data could include but is not limited to confirmed data from sub-tier suppliers; operational, performance, and cost data from external service providers such as transportation companies; financial status of suppliers, relevant information on weather conditions, political unrest, regulations, or other geographic supply chain risks.
Importing and integrating these various data sources is automated with regular updates. It is also reviewed and fact-checked by human intelligence. Together, this ensures that organizations always get the most up-to-date and relevant information available.
Figure 1: You need AI and human expertise in supply chain risk management software to ensure that you get the alerts that are relevant for your supply chain.
Update frequency depends upon the organization’s operational requirements and the availability of new source data. Delivery status information from a third-party logistics provider might be updated every few minutes. In contrast, updates on marine vessel movements might be available every few hours, and labor action updates every day. The data used to risk assess your supplier network might be handled more periodically.
The software platform uses this rich and granular data in several different ways. It can provide detailed dashboards allowing supply chain teams to see the overall status of their networks at a glance. They can also drill down into the details of specific locations, nodes, routes, or materials. It can monitor supply chain operations and automatically trigger alerts for suppliers whose operations are at certain risk levels, or shipments at risk of delay.
