IDENTIFY, ASSESS AND MITIGATE: OPTIMISING SCRM
Risk comes with the territory when you do business. A reality inside and outside any organisation, risk factors are particularly omnipresent across the supply chain, many of which hide in plain sight.
Consequently, given their ubiquity, it comes as no surprise that supply chain risk management (SCRM) programmes are proliferating, as organisations naturally seek to address anticipated and unanticipated events, both upstream and downstream in the supply chain.
Testifying to the uptick in SCRM activity is the 2017 Deloitte report ‘Understanding risk management in the supply chain’, which states that SCRM has: “become increasingly important as companies both large and small seek to extend their global reach”. Furthermore, continues the report, “enterprises entering new markets often need to form new supplier relationships, engage with state-owned entities, and adapt to local laws and culture. The resulting complexity in the supply chain can mask a wide range of financial, regulatory and legal risks”.
Further supply chain risks facing organisations are outlined in PwC’s ‘Supply Chain Resilience: Will your supply chain break? And will you see it coming?’ – 2018 analysis which highlights the vulnerability of supply chains and the impact this can have on an organisation’s operations. “Risks to supply chains can be diverse, whether they are due to operational failures, like suppliers failing to meet quality standards, geopolitical influences, failing to deliver to performance times, or because of financial volatility or shortages of materials,” notes Dan Eason, business continuity manager at PwC. “This volatility requires supply chains to balance efficiency with resilience.”
Apr-Jun 2020 Issue
Fraser Tennant