Running a small business isn’t without risk. However, there are measures you can take to reduce some risks. This includes your supply chain. Following these suggestions for mitigating risk in your supply chain can help you achieve a smoother business, even when things don’t go as planned.

1. Conduct a Risk Assessment in Your Supply Chain Operations

You probably carry out risk assessments in other parts of your business, so do the same with your supply chain operations makes sense. Conducting a risk assessment will highlight the problems you might face with your supply chain in the near and more distant future.

For example, consider political uncertainty, which might cause specific industries to strike, natural disasters, or price rises. This can form the basis of your assessment. Ask yourself how likely these events are, based on past and current problems you or other businesses have faced. Then you can find solutions to those which are most likely to happen.

2. Develop Contingency Plans

Once you’ve established your biggest risks, you can form a contingency plan. For instance, strikes in a certain industry, such as the postal service, may impact you when buying and selling. A contingency plan might look at other methods of sending and receiving goods, such as a courier. Or you may look at local suppliers where you can arrange a collection or local delivery. You may make a shortlist of other suppliers and their prices, just in case.

3. Build Supply Chain Resilience

You can build supply chain resilience by not relying on one supplier. This leaves you with other options if the supplier goes out of business, raises prices, or you cannot continue working with them for other reasons.

You can also reduce misunderstandings by being transparent and encouraging them to do the same. Delays and other problems may happen occasionally, but it can help you run your business more efficiently if you know about these as soon as possible.

4. Identify Areas for Improvement

Your supplier may tick most of the boxes for your business needs. However, constructive feedback and suggestions can be helpful if you feel they could change anything. Try to show how these improvements could benefit them for the best results.

You should also look regularly at how well your supply chain works for your business needs. Things can change. You may expand in some areas or see less demand in others. If you need to change anything, it helps to do this quickly to keep up with demand or the lack of it. Then you can focus your time and resources on doing more of what currently works for your business.

5. Improve Collaboration With Suppliers and Partners

Communication with suppliers can’t be overstated. So, working together to create an easy way of keeping in touch during business transactions can improve the working relationship. It also ensures everyone has clear expectations when a problem occurs. This way, a quick solution can be sought to get things back on track. Technology such as supplier portals is a great way of achieving this communication and collaboration.

Use and share data and analytics to see what works for you collectively. It’s also worth being open to feedback too. By collaborating and sharing ideas, you might find a solution that works better for you.

No small business is without risk. Yet, by following the above suggestions, you can be more prepared to tackle potential risks with your supply chain. This will keep your business running as smoothly as possible.