Remember the Japanese earthquake and tsunami that crippled the electronics supply chain? Or the floods that swept through Thailand and hit the disk drive industry? Or how Hurricane Sandy brought much of the US East Coast to a standstill?
The list of natural and man-made disasters goes on and on. Each time there’s a disruption, supply chain executives promise to find ways to avoid the problems that crop up in the aftermath. Risk management is often the phrase that people toss around as a means to that end.
The issue, however, is that many people don’t understand the full scope of risk management. A recent webinar hosted by Supply Chain Insights highlights some of the stumbling blocks companies face when addressing risk management and offers insights about how to protect the supply chain from an upheaval.
Simply defining supply chain risk management is sometimes a big task. So let’s start there.
“Supply chain risk management is the proactive identification and assessment of potential risks to the supply chain, as well as the development of strategies to avoid these risks,” said Lora Cecere, founder and CEO at Supply Chain Insights, during the webinar.
The firm ran a survey in February and March to find out where people were in their thinking about risk management. On the plus side, based on responses from 46 manufacturers, retailers, distributors, and third-party logistics providers, many said risk management was important to their companies and that there is a growing awareness about the nature of risk at their companies. Additionally, the responsibility for overseeing and executing the supply chain risk management strategies lands in the hands of an executive with a C-level title, and more frequently that person is becoming the chief or vice president of supply chain, Cecere said.
