Very interesting article here about the shareholder value impact of supply chain risk.  According to the article, “businesses must remain prepared to adapt to adverse events. Organizations that are better equipped will gain competitive business advantage while improving reputations, while ill-equipped organizations will lose market share and shareholder value.”  The article goes on to state that “Companies that are able to avoid disruptions will be regarded as a superior shareholder value in 2008 –shares of resilient companies should perform better.”

This is one of the first times that I’ve seen supply chain risk management be tied so directly to financial impact to the organization and, ultimately, shareholder value.  I think the article is right on the mark.  Unfortunately, supply chain management is too often viewed of as a tactical issue where cost reductions and savings is the main objective.  The article clearly points out the strategic impact of supply chain management and, specifically, the growing importance of being able to respond to change. 

The implications are clear, companies that can respond quickly and effectively to unexpected supply chain risk are in the best position to avoid customer erosion and win new business and are best positioned to avoid costly excess and obsolete inventory and other negative operations performance impacts associated with poor responsiveness.

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