Risk management has been a common topic for the electronics supply chain for a long time. Recently, though, supply chain risk management chatter has reached an all-time high.
Perhaps the intense interest has been driven by extreme events in the past year, such as natural disasters (hurricanes, tsunamis, etc.), as well as emerging threats and systemic vulnerabilities (oil dependence, armed conflicts, etc.). For example, in October 2012, Hurricane Sandy closed ports and airports in the northeastern United States. Floods in recent years also plagued Thailand, hitting more than 1,000 factories and creating huge problems for the automotive and high-tech industries.
“The risk becomes more complex as supply chains are more global in nature,” said Richard Waugh, vice president of corporate development at Zycus, a procurement solution vendor. “It has taxed and gone beyond what the legacy capabilities might be in some organizations.”
Further adding to the tension is an increased understanding of supply chain security, including regulatory risk, brand risk, and counterfeiting. Then, of course, are the normal risks of disruption, allocation, capacity, quality problems, and shortages.