A Proven Method to Assess Your Supply Chain Risks

By Keith Mitnik / July 08, 2022

Phoenix Display International - A Proven Method to Assess Your Supply Chain Risks

Working with the LCD supply chain has always come with certain risks, but they’ve only increased over the past couple of years. As the pandemic disrupted businesses and freight logistics, supply chain risks have multiplied. If you’re worried about maintaining your product quality, or simply want to understand the risks you face, here are six questions to consider. 

1. What is the status of your parts’ obsolescence?

Obsolescence happens, but it shouldn't be the cause of a disordered supply chain. This is because suppliers who understand your needs should be proactive in identifying when a component may become obsolete and working to create a solution in advance. If you aren’t sure of upcoming obsolescence, ask your supplier(s). If they can’t give you a straight answer and estimated timing, this is a red flag that you’re at greater risk than you should be.

2. How trustworthy is your supplier in terms of delivery?

More supply chain risks are rooted in delivery issues than anything else. Delivery can be impacted by many external factors, but many are surprised to learn that your supplier makes a huge difference in how smooth and reliable your deliveries are.

So, what have your supplier’s actions shown you in the past? Can you call them with concerns about delivery, and be answered by someone who knows who you are and what you’re building? Are they responsive to your situation and work with you to head off a crisis? Can they push your order ahead and get it filled faster, if needed? All of this matters, and can make a big difference in reducing supply chain risks.

3. Are you making sacrifices in quality to cut costs?

There’s always a give and take between quality and costs, but many companies don’t know how to figure out if they’re striking the right balance. Consumer products are often sold at extremely cheap prices while products for certain industries, like aerospace, require incredibly high precision and a zero-failure rate. Those are the two ends of the quality/price spectrum, and it’s important to know where you fit.

Make sure you’re not swinging too far to one or another end of this spectrum, or you’ll end up either sacrificing quality or paying too much. At Phoenix Display, we optimize to give you the best of both worlds. We build industrial products that can take a beating and have a long service life, but don’t have the excessive costs associated with the aerospace level of certifications.

4. Have customers complained about your product’s design?

Take a moment to review the feedback you get from customers. Have they raised concerns about your product’s design? If so, this is a yellow flag that your performance is falling behind. If this is the case, remember that working with the right supplier can go a long way in remedying this and reducing associated risks. For example, they can help make your product more competitive by improving the way it serves your end customer.

5. When was the last time you compared cost quotes from multiple suppliers?

Component pricing can be one of the most difficult aspects of running a business. Aside from a supplier unexpectedly raising costs, there are not a lot of signs you can spot that indicate whether you’re paying too much. So, take the time to compare quotes from different suppliers serving your industry in order to get an accurate view of the bigger picture. When you do, you’ll quickly see whether you’re paying the right price or not - and can adjust course if needed. 

6. Before starting a new design, have you taken the time to understand the needs of the end consumer?

Finally, there are many risks when it comes to creating a new product, but it can also be a great time to form new vendor relationships. Before seeking out new vendors, dig into what problems you’re trying to solve for your customers. This will help you think through how they’ll interface with the product and what environment they’ll use it in. From there, you can have discussions with potential suppliers who can draw out all the different specifications you may need. 

If you’ve gone through these questions, you should have a better understanding of your supply chain risks - and opportunities. Your supplier(s) can make a big difference in your success, so think through if the current level of support you’re receiving is enough.

Interested in learning more about our approach to providing custom LCD display solutions? Contact us anytime!

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Topics: Quality, Supply Chain, Supply Chain Risks