Putting supply chain risk management in perspective
If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Great post over at Solectron’s blog talking about putting supply chain risk management into perspective. When supply chain risk comes up, it’s usually the headline grabbing examples that get all the attention. Things like hurricanes, strikes, terrorist attack, etc. are always mentioned. There’s no doubt that these risks are potentially devastating, but I would define these as low frequency.
What about the high frequency risks? What about those unexpected customer demands that always pop up? While a natural disaster is automatically assumed to be devastating to the business, these higher frequency risks can be too. What happens when you’re company can’t effectively respond to that customer request, and they go to a competitor? The aggregate effect of hundreds of these events mis-managed over time can be equally devastating to the business.
I liked the Solectron post because it focuses the attention back to the more likely events and their true impact - lost sales.
