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Examples of economic issues are a supplier going bankrupt, a recession or a work stoppage at a key manufacturing partner. Most of the risks that could disrupt your operations fall into four broad categories: economic, environmental, political and ethical. Peter Bolstorff, EVP of the Association for Supply Chain ManagementĪs the world’s largest nonprofit association for supply chain, the Association for Supply Chain Management connects companies to thought leadership on all aspects of supply chain. identify and erase inefficiencies in their transportation and logistics processes. ICC Logistics Services helps executives throughout the U.S. Tony Nuzio, founder and CEO of ICC Logistics Services Jack Cunningham handles purchasing and manages relationships with suppliers around the world. Jack Cunningham, purchasing manager at a global consumer products company Joe Sarkis, supply chain management professor at Worcester Polytechnic InstituteĪ professor of over 30 years, Joe Sarkis’s research is primarily in environmentally-focused operations, technology and supply chains. Steven Melnyk, professor of supply chain management at Michigan State UniversityĪ long-time supply chain management professor, Steven Melnyk’s research focus includes supply chain risk and resilience, as well as strategic supply chain management. Jim Yarbrough, global intelligence program manager at BSI GroupīSI Group is a London-based trade and development firm that consults businesses worldwide on practices ranging from data management to handling supply chain risk.
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We consulted supply-chain experts to develop a clear picture of the risks business leaders need to consider when assessing their suppliers, what they can do to mitigate those risks and how technology can assist in these efforts. Leaders are acutely aware of the need for a clear strategy to reduce risks in their supply chain, and they should also know they must continuously evaluate and improve upon that strategy. These organizations can’t match the cash reserves of large enterprises, so the effects of a problem can be more immediate and severe. “The supply chain must be secure and resilient, and we need alternate suppliers we need alternate routes.”įor a growing business, the impact of not having inventory to sell or materials to manufacture goods can be devastating - the Federal Reserve estimates the pandemic knocked out 200,000 businesses in 2020. “COVID has pushed all of these concerns up to the front of everybody’s mind, and it’s very boardroom-relevant now,” said Jim Yarbrough, a global intelligence program manager at BSI Group, who consult with businesses on reducing supply-chain risks. More recent issues like a grounded container ship blocking the Suez Canal and winter storms in Texas have emphasized the point. Since then, the supply chain has become a front-and-center issue at the highest levels of a business. Of course, that all changed last year when widespread shortages and delays affected businesses around the world and across industries. It was the domain of operations and warehouse managers (or, increasingly, third-party logistics partners). But for the most part, so long as everything was running smoothly - and it usually was - logistics were not a top concern for the C-suite. Organizational leaders knew the company’s key suppliers, kept an eye on monthly purchasing costs and may have helped resolve delays or other minor disruptions that popped up from time to time. They should also focus on tightening relationships with their supply chain partners.īefore 2020, the supply chain may have been something of an afterthought for the owners and leaders of many small- and medium-sized businesses. Beyond diversifying suppliers, growing businesses might mitigate these risks by increasing on-hand inventory for certain products.We walk through a few techniques companies can use to pinpoint the risks that their suppliers present, assess the degree of risk and determine how much those threats matter.After a stream of supply-chain issues, business leaders have realized the strategic importance of supply chains to the overall health of their organizations.