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Supply Chain Risk Management

Supply Chain Risk Management is a multi-faceted and dynamic landscape of risk vectors and opportunities that must be consistently assessed and constantly updated to reflect the many macro supply chain risk drivers, from geopolitical risk, trade wars and industrial espionage to modern slavery and climate change. Social media and the 24/7 news cycle amplify reputational risk exposure.

 

To address these diverse risks and develop a future-proof SCRM solution, organizations must integrate the right technology, ensure tailored compliance processes and governance, and leverage modern SCRM expertise.

What is Supply Chain Risk Management?

The past few decades have seen supply chains grow increasingly large, complex, and globalized. In turn, supply chain disruptions are increasing in frequency and severity. A recent Gartner survey revealed that over the past 5 years, 89 percent of companies experienced a supplier risk event. As a result, a McKinsey study revealed that over 90 percent admit they’re actively attempting to make their supply chains more secure, resilient, and agile in the face of overwhelming risk.

 

Supply chain risk management (SCRM) refers to the tools, processes, and strategies public and private entities use to identify, mitigate, and combat supply chain threats. SCRM takes many forms and often requires deep interdepartmental cooperation. To truly protect your supply chain, you need to prepare for known and unknown risks across every layer—including your third-party suppliers and customers.

Why is Supply Chain Risk Management Important?

Supply chain risk management isn’t disruptive; it’s the table stakes. At least one in twenty companies has experienced a supply chain disruption costing over $100 million in the past few years. The frequency of these disruptions is increasing at a rapid pace.

The benefits associated with SCRM optimization are extensive. Imagine: higher optimization, fewer disruptions, higher resilience, and significantly increased profitability across virtually all business segments.

But very few companies have robust supply chain risk management. According to McKinsey’s recent survey of supply chain leaders:

  • 55 percent have no visibility into their upstream supply chain
  • Only 14 percent have visibility into third-tier suppliers
  • 83 percent experienced raw materials shortages over the past year
  • A mere 37 percent perform scenario planning
  • 67 percent have implemented digital dashboards for visibility (of note: these companies were 2x less likely to experience disruptions than those without dashboards)

The value of SCRM optimization isn’t lost on supply chain management leaders. Ninety-seven percent have been actively investing in supply chain risk management tools and technologies. But putting together the pieces isn’t always easy.

Beyond the tangible value, supply chain risk management is becoming an increasingly important part of compliance. Since 2018, the United States government has introduced multiple regulatory frameworks and agencies aimed at improving resilience across industries.

These include:

In addition, multiple independent risk management strategies have popped up, each aimed at solving supply chain frictions.

Threats Posed by the Top Supply Chain Risk Categories

Supply chain attacks come in many shapes and sizes, and they expand daily. Most of these risks can be organized under societal, ethical, economic, and political buckets. These include things like:

  • Climate events
  • Cybersecurity threat actors
  • Global warming
  • Multipolar economic systems
  • Trade frictions
  • Terrorist threats
  • Pandemics
  • Acute disasters
  • Nation-state attacks

Importantly, new supply chain risks are identified yearly. During the pandemic, companies recognized once-invisible supply chain threats such as pandemics, lockdowns, and global geopolitical tensions that had rarely impacted them before. This trend of new threats being spawned from globalized events will continue to grow. Supply chain risk management isn’t solely focused on mitigating known risks; it should focus on end-to-end visibility—giving you the agility and resilience to tackle new forces.

 

To identify and remediate these risks at scale, companies need to build robust supply chain risk management programs.

Building Blocks of an Effective Supply Chain Risk Management Program

An effective supply chain risk management program requires three basic building blocks:

 

Transform Your Supplier Data Into Actionable Insights

Building your own SCRM plan isn’t necessarily easy. But practically approaching the problem reduces many of those upfront headaches. Start by identifying known risks, documenting them, and creating a framework to tackle them.

 

Next, incorporate the right tools and technology. You want to leverage your existing supplier data to get end-to-end visibility into supply chain risks. These tools should help you identify known risks and scout unforeseen risks. Constant monitoring is the key to successful SCRM practices.

 

Finally, implement governance and processes to regularly review risks, formulate plans, and bridge gaps between knowledge and identified threats. Eventually, you can bake risk awareness into your company culture, especially as you start to fully understand risk verticals through regular monitoring and threat mitigation.

 

However, all of these internal changes deeply rely on the right technology. You need crystal-clear visibility into every layer of your chain — even at the nth level.

Next Level Identification for Nth Level Clarity

At Exiger, we specialize in identifying risks for nth-level suppliers. Most organizations have little-to-no visibility beyond first-level suppliers. Yet, eighty-seven percent of companies deal with disruptive incidents from third-party suppliers. You need to understand every node in the chain. We can help.

 

Supply Chain Explorer identifies all of your nth-tier suppliers, applies risk scores to them, and traces their data sources. We let you know exactly where your risks lie on a day-to-day basis. This allows you to plan processes and governance around the identified risks.

Power and Prioritize with Dynamic Dashboards

You need to understand where your risks come from, and how to mitigate them with haste. Exiger’s dynamic and powerful dashboards visualize tangible threats and present meaningful recommendations for change.

 

Organizations using these dashboards see 2x fewer disruptions. Those who rally governance and combined expertise around these dashboards see even fewer. Risk decision-making has never been easier.

Configurable Visual Risk Assessments

Seeing is believing. Exiger doesn’t just leverage best-in-class data to deeply analyze your suppliers across tier levels, we give you configurable and hyper-visual risk assessments. These assessments empower change. Supply chain leaders, IT, public relations, logistics, and all parties involved in your supply chain risk ecosystem can quickly and easily digest threats. Once you see your enemy, you know where to strike with clarity.

 

Plus, our layers of configuration make it easy to shift your focus when new threats or regulatory needs evolve. You can customize Exiger to meet your needs.

Exiger uses technology to make the world more transparent. We illuminate the dark corners and alleys so there are fewer places for criminals, terrorists, and foreign intelligence agents to hide.

Technology Alliances Manager

SVP, Exiger Federal Solutions

Accelerate Transparency in Your Supply Chain

Exiger’s purpose-built technology surfaces the risks that may be hiding deep within your supply chain.

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False Positive and Noise Reduction
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Access to Information from 300M+ Companies & 6B People
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Purpose-built Technology for Corporates, Government Agencies and Critical Infrastructure

Exiger’s DDIQ platform allows government agencies to gain new levels of insights into where risks exist within their supply chains. As the public sector modernizes its IT infrastructure and eyes new solutions, being able to leverage the scale and speed that DDIQ’s AI-enabled solutions offer provides agencies the peace of mind of knowing their risk assessments are current and actionable.

Innovative and Intelligence Solutions at Carahsoft

SCRM

Level Up Your SCRM with Exiger

Building a resilient supply chain requires the right tools, methodologies, and real-time insights. Exiger can help. Our solution helps decision-makers create end-to-end SCRM programs that leverage real-time metrics and dynamic vendor risk scores to clarify and demystify supply chain threats.

 

Learn more about our Supply Chain Explorer and DDIQ solutions. For more data-driven insights to help you build supply chain resilience and manage vendor risk, check out our TRADES framework white paper or see our case studies.

Supply Chain White Paper
20 Years Government Performance and Partnerships with Tangible & Proven Results