Supply Chain Solutions

Supply chain interruption—supplier and customer—must be a concern for everyone in the organization, not just the risk manager. It takes an in-depth understanding of the organization's work product and service process and its ability to sustain itself in both the short term and long term without the critical supplier or customer.  The organization needs to have backup plans for alternate supply sources as well as other customer outlets before disaster strikes either a supplier or a customer.

 

The risk management professional must think in terms of contingent exposures: what can happen elsewhere to disrupt operations at any of my organization's locations. The risk manager's exposure analysis cannot be limited to physical items such as raw materials and finished products but must include the soft side of the organization's services such as call centers, technical support, and order processing, to name a few.

 

Proper attention to each step of the risk management process is critical to identify all appropriate issues related to supply chain exposures.  The creation, modification, and implementation of a business continuity plan may be the most efficient risk management technique for Supply Chain Management in any organization for both its short-and long-term success. While risk financing, such as contingent business interruption insurance, may provide needed funds during a time of interruption, it will last for a finite time—a period likely much less than the actual period of interruption.

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