Supply Chain Risk Management Blog

Risk Management Perspectives Part 3: enterprise wide information gathering and supply chain tools

The final installment to a Q&A series, generated following a prominent Risk Management publication’s request for industry expert opinion.

q. “What tools can companies use to manage their supply chains and ensure they have up-to-date information on their whole extended enterprise?”

a.”For a multi-national organisation, the risk management of thousands of suppliers is not practical unless a prioritisation method is applied. This method should not be based purely on volume of spend; a more robust approach to SCRM is needed which should include quantification of financial exposure to all critical supply points (both internal and external, and 1st tier and Xth tier suppliers).

Having built up a detailed picture of critical supply points, and taken steps to reduce key exposures, the final step is to monitor the status of those locations. In a recent KPMG report entitled ‘Enhancing supply chain networks for efficiency and innovation’ only 9% of the respondents said they could assess the impact of disruptions within a matter of hours. The 9% have a competitive advantage by being able to respond quickly to failures in their supply chain. In our data rich world, there are many information feeds ranging from natural hazard alerts to financial monitoring, which can help supply chain managers to stay on top of the status of critical supply points.”

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