Tuesday 13 August 2013

Going Beyond Supply Chain Risk Basics

Authored by Claire Sexton

My American colleagues often read Deloitte’s ongoing series in the Wall Street Journal regarding supply chain issues. One of the consultancy’s latest articles was about risk in the supply chain and the questions they often are asked.

We’ve written about risk many times on this blog, so I read the article with the intention of learning something new. However, I was a bit shocked about how basic these questions were:

· Why is supply chain risk something companies and their executives should be worrying about now?

· Many companies have already spent a lot of time and money on supply chain improvements. What more can they do?

· For companies that have mostly used external suppliers, isn’t supply chain risk the suppliers’ responsibility?

· How can supply chain risk be eliminated if the future can’t be predicted?

According to a 2012 A.T. Kearney study, 80 per cent of organisations are vulnerable to a major supply chain disruption. Perhaps it’s a good thing that Deloitte is explaining these questions after all…

Some other questions we often hear from our customers as they develop plans to mitigate risk:

· How do current suppliers impact bigger business philosophies (corporate social responsibility, for example)?

· What data do we have from our suppliers? How can we compile and integrate this data to review previous trends, gaps in contracts and orders, and focus on patterns that will uncover problems before they arise?

· When we look at suppliers and supplier’s suppliers, what are the concerns or potential issues that may cause supply interruptions?

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