Managing supply chain risk
Tim Minahan has a really well done post over at Supply Excellence talking about managing supply chain risk.
Tim quotes Mark Hillman of AMR Research who says “The greatest risks are the day to day operational risks that can detract from shareholder value and performance. You need to focus on high probability risks that you can control, such as supplier failure or market risks, and take steps to mitigate these.”
When most people talk about supply chain risk management, they tend to focus on the larger natural disasters and such. These are obviously critical because of the magnitude of impact they can have. However, as Mark points out, there are tons of risk vs. opportunity decisions that have to be made everyday in most organizations. Quickly identifying and responding to these risks is critical to operations performance and requires visibility and tools in the hands of those that can act.
