Supply Chain Questions to Ask
Questions for reviewing a supply chain, whether it belongs to your own company, a supplier you are qualifying, or a business you are buying. Each one is written to be answerable with a number, a date, or a named person.
The questions
Open any question for the note
Where is your inventory right now, and how current is that number?
Why ask it
The lag matters more than the tool. A figure assembled overnight from three systems means today's decisions are being made on yesterday's picture, and nobody in the room usually says so.
How accurate was last quarter's forecast, and how do you measure that?
Why ask it
Ask for the error metric by name and the level it is calculated at. Accuracy quoted in aggregate can hide serious error at item level, which is exactly where stockouts happen.
Which items are single sourced, and why those?
Why ask it
A ready list means somebody tracks it. If the answer is that nothing is single sourced, test it by asking about tooling, packaging, and one specific component.
What are your lead times by supplier, and how much have they moved in the last year?
Why ask it
Lead time drift is the quiet cause of most inventory problems. An operation still planning on last year's parameters is carrying either stockouts or excess stock, and usually does not yet know which.
What did your last failed shipment cost you?
Why ask it
A costed incident means somebody did the postmortem. If nobody can put a figure on it, disruption is being absorbed by people working late rather than managed.
How do you set safety stock?
Why ask it
Look for a calculation that uses demand variability and a service target. A fixed number of weeks across the board is a rule of thumb set years ago and rarely revisited since.
What share of orders ships complete and on time?
Why ask it
Ask how they define complete, because line fill, order fill, and case fill flatter to different degrees. The definition often explains a suspiciously high number.
Who can hold a shipment, and who can authorize expediting?
Why ask it
Authority boundaries determine response speed. A process that requires senior approval for every exception gets bypassed informally, and the workaround becomes the real risk.
How do you audit suppliers, and when did someone last visit one?
Why ask it
Document reviews and site visits find different problems. Long gaps between visits usually mean supplier performance is only discovered through complaints.
What are your payment terms, and are any suppliers struggling with them?
Why ask it
Extended terms push working capital onto smaller suppliers and can create a failure risk inside your own chain. Awareness of which suppliers are strained is the useful part of the answer.
Which regulations constrain how you move or store these goods?
Why ask it
Ask for the specific rules affecting current products and lanes. A general answer about compliance suggests the knowledge sits with a broker or one long-serving individual.
How much of your volume moves through a single port, lane, or carrier?
Why ask it
Concentration is easy to miss because it works right up until it does not. A number here, rather than reassurance, shows the exposure has actually been quantified.
How do returns and reverse flows work?
Why ask it
Reverse logistics is where cost hides, because returned goods sit uncounted in a corner for weeks. Ask who makes the disposition decision and how quickly it happens.
When is your peak, and how do you staff and store for it?
Why ask it
Peak planning shows whether capacity is planned or improvised. Temporary labor arranged late arrives with training and accuracy problems attached, and those show up in the error rate.
What does your team spend the most manual effort on?
Why ask it
Points straight at the biggest process gap. In most operations the answer is reconciling data between two systems that were bought separately and never properly joined.
Which metrics do you report upward, and which do you actually manage by?
Why ask it
The two lists differ in most operations. The internal set is the real dashboard, and it is the one worth asking to see.
How would you know if a supplier were in financial trouble?
Why ask it
Look for concrete signals: changed payment requests, slower responses, credit monitoring. Assuming a supplier would tell you is the common answer, and supplier failure is usually visible months earlier.
What did you plan to improve last year that didn't happen?
Why ask it
Stalled projects reveal the real constraint, whether that is money, IT capacity, or attention. It is also a fairer question than asking directly about failures.
Where would a ten percent volume increase break first?
Why ask it
Forces identification of the binding constraint, whether that is warehouse space, one supplier's capacity, or a single qualified operator. Answers that name a specific place are the credible ones.
What are you doing now that you wouldn't do if you were starting from scratch?
Why ask it
Surfaces legacy decisions that people work around every day. Long-serving staff answer this well, and the answer usually explains several other things you have already been told.
How to use these questions
Practical guidance for the conversation itself
Working through a review
Start with numbers, not policies
Open with inventory position, forecast error, and on-time delivery. Once figures are on the table the rest of the conversation has something to attach to, and it becomes much harder to answer in generalities.
Ask the same question at two levels
Put the service level question to the director and then to a planner. Where the two answers differ is usually where the reporting has been smoothed, and that gap is the most useful finding in any review.
Follow the exceptions
Ask what happened to the last late order, the last quality failure, and the last emergency shipment. Exception handling shows how the operation behaves under stress, which is what you are trying to assess.
Where the risk usually sits
- Single-sourced components that nobody has on a list, particularly tooling, packaging, and specialty chemicals.
- Lead time and variability parameters in the planning system that were set once and never reviewed.
- One spreadsheet, maintained by one person, that the plan depends on and nobody else fully understands.
- Concentration in a single port, carrier, or customs broker that has worked well enough to go unexamined.
- Suppliers under financial strain from extended payment terms, especially small ones with a large share of your volume.
Common pitfalls
Accepting an aggregate number
Forecast accuracy, fill rate, and inventory turns all look better at a total level. Ask for the same figure at item, site, or customer level before drawing any conclusion.
Mistaking a certificate for a practice
Certifications and supplier codes of conduct describe requirements, not behavior. Ask when a supplier was last visited and whether anyone has ever been dropped for failing.
Reviewing only what is easy to measure
Cost and service are tracked everywhere. Returns, obsolescence, and expediting spend are often uncounted, and that is usually where the money goes.
Asking the questions once
Lead times, concentration, and supplier health all change. A review that is not repeated on a schedule describes an operation as it was, not as it is.