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How can you measure e-commerce supply chain risk?

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E-commerce businesses depend on their supply chains to deliver products to customers efficiently and reliably. However, supply chains are vulnerable to various risks, such as disruptions, delays, quality issues, fraud, cyberattacks, and environmental impacts. These risks can affect customer satisfaction, operational performance, and profitability. Therefore, e-commerce businesses need to measure and manage their supply chain risk effectively. In this article, we will discuss how you can measure e-commerce supply chain risk using four steps.

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Jeremy Merrell Williams

I Launch & Scale Premium Brands with a laser focus on Customer Acquisition and Brand Management. Luxury | Beauty |…

1 Identify your supply chain risk factors

The first step in managing supply chain risk is to identify potential sources of risk. To do this, you can use a risk matrix or a risk register to assess the likelihood and impact of each risk factor. Common risk factors for e-commerce supply chains include supplier reliability, transportation and logistics, inventory management, demand and sales forecasting, cybersecurity and data protection, compliance and regulations, and sustainability and social responsibility. You must consider how likely it is that each of these issues could lead to delays, damages, losses, thefts, customs issues, stockouts, overstocks, obsolescence, spoilage of products, inaccurate demand or sales predictions, cyberattacks or data breaches, non-compliance with legal or ethical standards, or environmental and social impacts.

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Jeremy Merrell Williams

I Launch & Scale Premium Brands with a laser focus on Customer Acquisition and Brand Management. Luxury | Beauty | Fashion | Tech are our playground. Let’s elevate your vision. DM me. Let's go. ????
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Look, every brand out there wants to be that next big thing, but if you ain’t got your supply chain tight? Man, you’re just setting yourself up for some major headaches. That supplier reliability? That’s your backbone! If they ain’t coming through for you, your whole operation can come tumbling down. And don’t even get me started on cybersecurity and data protection. In this digital age, that’s like the unsung hero of e-commerce. One wrong move, one weak link, and boom – your brand’s reputation? Down the drain. But on the real, it’s not just about spotting these risks. It’s about being proactive, being two steps ahead. So when you lay out that risk matrix or register, you ain’t just doing it for the sake of doing it.

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2 Collect and analyze your supply chain data

The second step is to collect and analyze data that can help you measure your supply chain risk. You can use various tools and methods, such as key performance indicators (KPIs) and risk indicators (RIs). KPIs track the performance of your supply chain processes, while RIs track the exposure or occurrence of your supply chain risks. Benchmarking is a method of comparing your supply chain performance and risk with your competitors or industry standards, and data visualization is a method of presenting data in graphical or interactive formats, such as dashboards, charts, or maps. All these techniques can help you identify patterns, trends, or anomalies.

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Jeremy Merrell Williams

I Launch & Scale Premium Brands with a laser focus on Customer Acquisition and Brand Management. Luxury | Beauty | Fashion | Tech are our playground. Let’s elevate your vision. DM me. Let's go. ????
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Data is like that secret sauce, right? You might have the freshest ingredients, the dopest chef in the kitchen, but if you ain’t got that special sauce, your dish might fall flat. That’s why collecting and analyzing that data is essential to cook up some success. So you’ve got your KPIs and RIs – these are like your eyes and ears in the e-commerce jungle. They’re giving you that intel, that lowdown on what’s popping and what’s not. KPIs let you know if you’re hitting the mark, while RIs tell you where those sneaky pitfalls might be lurking. And trust me, in this game, you want to be ahead of the curve, not playing catch-up.

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3 Evaluate and prioritize your supply chain risks

The third step is to evaluate and prioritize your supply chain risks based on the data you collected and analyzed. Various frameworks and techniques can be used for this, such as risk score, which is a numerical value that represents the level of risk for each risk factor; risk map, which is a visual tool that plots the risk factors on a matrix; risk appetite, which is a statement that defines the amount and type of risk that you are willing to accept or tolerate; and risk ranking, which is a list that orders the risk factors from the highest to the lowest risk score. All of these tools can help you identify and manage your supply chain risks in line with your business objectives, strategy, and culture.

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4 Implement and monitor your supply chain risk mitigation strategies

The fourth step is to implement and monitor your supply chain risk mitigation strategies, based on your risk evaluation and prioritization. You can use various options and actions, such as risk avoidance by eliminating or avoiding the risk factor, risk reduction by minimizing or controlling the risk factor, risk transfer by transferring or sharing the risk factor with another party, or risk acceptance by accepting or retaining the risk factor. It's important to monitor the effectiveness and efficiency of your strategies using KPIs and RIs, and adjust them as needed due to changes in your supply chain environment and performance.

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Tracy Manning

Sr. Strategic Account Executive, Digital Identity at LexisNexis Risk Solutions - Transforming identity proofing & digital CX within #travel, #autorental, #ecommerce, #payroll & #HCM with digital identity intelligence
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As we move to doing more supply chain work online, one of the biggest risks we have today is data breach - particularly as it relates to third parties, affiliates, contractors & the like whom we may need to grant access to our data or systems to fill their roles in our supply chain. With more individuals working from home, the “whistleblower” factor that used to spot the majority of these risks is no longer present. Who will know if a third party sells its credentials that allow access to your data or systems to a 3rd party? Fortunately, there is a way to control for this risk. Passive, non-disruptive digital identity intelligence can detect & prevent these types of logins by bad actors who have come into possession of good credentials.

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5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How can you measure e-commerce supply chain risk?

1

2

3

4

5

1 Identify your supply chain risk factors

2 Collect and analyze your supply chain data

3 Evaluate and prioritize your supply chain risks

4 Implement and monitor your supply chain risk mitigation strategies

5 Here’s what else to consider

E-commerce

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How can you measure e-commerce supply chain risk?

1

2

3

4

5

1 Identify your supply chain risk factors

2 Collect and analyze your supply chain data

3 Evaluate and prioritize your supply chain risks

4 Implement and monitor your supply chain risk mitigation strategies

5 Here’s what else to consider

E-commerce

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