Supply Chain Risk Management

Supply chain complexity should be an advantage—not a weakness. Most supply chains are large, multi-tiered, and global. With the right tools and technology, this sprawling interconnectedness becomes advantageous. You build extra resiliency and relationships that can help you navigate crises.

However, without the right tech stack, these global supply chains become opaque. You need to be able to spot weak points and vulnerabilities across every supplier. For larger companies, suppliers are in the tens of thousands, each with its own unique threat landscape.

Risk management tools uncover supply chain weaknesses and threats. Ideally, the tools you choose will be customized to your organization. They help you identify threat impacts, supplier vulnerabilities, and preparedness across every node in the chain.

Most surveyed supply chain leaders are heavily investing in these tools and technology, and sixty-seven percent have already fully-incorporated technology to help them improve visibility across their supply chain.

Given the deep impact of supply chain risk management, cross-functional governance is a must. Stakeholders (often in IT, logistics, public relations, and supply chain management) should regularly meet to discuss risks, improvements, and initiatives. Ownership is key. Supply chain risks shouldn’t be owned by one department. Instead, spread ownership across several key layers of your business.

We highly recommend building a so-called “risk management board” comprised of key business sectors. Data should be openly shared with C-level, and supply chain risk management should be a core component of growth— from top-to-bottom.

Risk management isn’t about avoiding every risk immediately. You need to incorporate risk governance and ownership into your SCRM process. Not only does this lead to investments and ongoing problem-solving, but it ensures that risk management is baked into your yearly budgets and company vision.

Risk management is complex. It involves many skills, tools, and processes. As an example, an organization uses technology to identify a supplier with questionable ethics. To protect its ESG reputation, this organization decides to cut ties with this supplier and identify additional suppliers. Public relations also need to be pulled in due to risk exposure and brand degradation. This straightforward process has already impacted multiple teams—including IT, supply chain management, finance, and public relations.

To successfully capture the needs of SCRM, you need combined experience. Supply chain risk stakeholders should have easy access to a wide range of roles and expertise. In addition, we highly recommend communicating with regulators and supply chain leaders. While regulations are still evolving, building around compliance and understanding needs across regulatory bodies is a powerful way to combine experience and create meaningful public-private partnerships.