Forbes recently picked up on the risk management component of a study from Accenture which includes supply risk as one of the major elements of enterprise risk. According to the article, "When the new world of data is combined with the complexities of the supply chain, things heat up. Companies have extended their supply chains, often in quest of lower costs, and the chains themselves are strung tighter than the proverbial drum. Missing a component can mean missing the market, as is the case with Sony today and others yesterday. In the end, you do not want to be caught with your components down." This is obviously an oversimplification of supply risk, but for a general business audience which does not follow the analysts, trades or blogs that cover the subject, it can at least serve as an introduction.
Moreover, Accenture found that the broader concept of enterprise risk is finally emerging in the executive suite -- and staying there. According to the article, "This year is the first time that risk has come out on top as the major concern in Accenture's executive issues study. The last three years ranked workforce improvement as the top issue. Human resource issues now appear to be less important. Changing organizational culture, which dominated in the last three years, has now fallen to No. 5 on the list of executive concerns. This is a seismic shift." Let's hope that executives begin to understand and take efforts to mitigate supply risk as companies embark down the path towards looking at enterprise risk overall. Personally, I wonder if it's going to take a major disaster (e.g., a domestic port shutdown or backup or a regional disaster in Asia) to create general awareness about supply risk management outside of procurement and operations in a major way.