For a small manufacturer, supply chain efficiency is often the enemy of resilience. You consolidate volume to get better pricing. You rely on a single "hero" supplier who knows your drawings by heart. You run lean inventory to save cash.
It works perfectly—until it doesn't. A fire at a plating shop, a strike at a port, or the sudden retirement of a key contact can bring your entire operation to a halt. Big companies have risk departments. You have... you.
Identifying Your "Single Points of Failure"
Risk management starts with a simple audit. Look at your Bill of Materials (BOM) and ask three questions:
1. The "Sole Source" Risk
"If Vendor X disappeared tomorrow, could I buy this part from anyone else?" If the answer is no (due to proprietary tooling, unique IP, or extreme qualification requirements), this is a critical risk.
2. The "Bus Factor" Risk
"Does my relationship depend entirely on one person?" If your pricing and service depend on a handshake deal with 'Old Jim,' you are exposed. When Jim retires or leaves, your priority status leaves with him.
3. The Financial Risk
"Is this vendor financially healthy?" Small machine shops can be fragile. If you are 50% of their revenue, their risk is your risk. If they lose their other big customer, they might go under, taking your tooling with them.
The "Plus One" Strategy
You don't need to double-source everything. That kills your leverage. Instead, adopt a "Plus One" strategy for your critical components.
The Rule: For every critical commodity (castings, motors, PCBs), have one primary supplier (who gets 80% of the volume) and one active backup (who gets 20%).
Why it works: Giving the backup 20% keeps them "warm." Their tooling is proven, their account is active, and they know your specs. If the primary fails, you can ramp up the backup immediately. If you keep the backup on the bench with 0% volume, they won't be ready when you call in a panic.
Geographic Diversification
If your primary and backup suppliers are on the same street, you haven't diversified risk; you've just diversified phone numbers.
Consider regional risks: weather (hurricanes in Florida), logistics (port congestion in LA), and geopolitics. A robust supply chain might have a primary in Asia for cost and a backup in North America for speed/insurance. The blended cost is higher, but the insurance against a 6-week stockout is priceless.
Digitizing Your Relationships
The biggest risk in SMB supply chains is information loss. "The quote is in Steve's email" is a disaster waiting to happen.
Centralize your vendor data. Contracts, drawings, quote history, and contact info should live in a system, not in personal inboxes. This ensures that if your buyer wins the lottery (or gets hit by a bus), the company can continue purchasing without missing a beat.
Summary
Resilience isn't about paranoia; it's about preparation. By identifying single points of failure and maintaining a "warm bench" of backup partners, you transform supply chain disruptions from fatal events into manageable nuisances.
Build Your Bench
Purchaser gives you access to a database of 200,000+ suppliers to find and qualify backup vendors instantly. Keep your "Plus One" strategy active and your supply chain secure.
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