19, January 2018
Visibility Crucial to Managing Supply Chain Risk
74% of supply chain companies have experienced supply chain disruption at least once, based on a recent Business Continuity Institute study. A similar number of respondents (72%) admitted to not having full visibility of their supply chain. Lou Feretti, Project Executive at IBM, and Pierre Mitchell, Chief Research Officer at Spend Matters, discussed supply chain risk in a webcast on 5/4. The two pointed out the challenges and complexities of supply chain risk, and how to overcome them. One issue that was frequently brought up was the visibility within the supply chain.
4 Steps for Responding to Risk
- Identify different types of potential risk your company may experience and the likelihood of these adverse events taking place.
- Monitor the supply chain to predict and discover events that have or will affect the supply chain.
- When an event is discovered, assess the severity and your potential responses.
- Work to reduce any damage that may be caused by the event.
Supply Chain Visibility is the #1 Challenge of Risks
70% of Chief Supply Chain Officers identified supply chain visibility as a major concern of risk. The above graph makes it clear that visibility is what leaders struggle with most in handling risk. Despite this fact, visibility is critical, based on the above 4 steps for responding to risk. By uncovering events earlier, companies are better able to assess the situation and their options. This will allow them to better mitigate any negative consequences of a major event. Through analytic tools, careful prediction, and close monitoring of the supply chain, visibility can improve. Full visibility can be difficult to accomplish, but it leads to greater response time and more effective responses.
Ask Who, Not What
Visibility is the largest issue related to risk, but the benefits of gaining visibility are innumerable. Consider hiring a team dedicated to supply chain risk management. An effective team will be experienced in adverse events and will have the knowledge to identify different types of risks and their impact. The team can develop and refine models for identifying and responding to risk, as well as use analytic tools to make accurate predictions. Having a team that is dedicated to risk management will ensure visibility and fast response.
This blog appeared http://www.mepsupplychain.org/visibility-crucial-managing-supply-chain-risk/