Supply Risk Tips From an Industry Expert

As frequent Spend Matters readers know, supply risk management is a topic that comes up quite often in these virtual pages. One of the reasons I've tackled it so frequently and kept it in at least these headlines is that they're too few experts in the market that talk about it on a regular basis. Sure, when a handful of pundits like us make enough noise, it can take make the cover of a periodical or two (as it seems to do from time to time). But the basic problem is that they're not enough third party experts taking a close look at it and sharing their thoughts with the broader procurement and operations community. The last industry analyst to cover it in a serious way was Mark Hillman, who produced some great material while he was at AMR Research. When Mark left recently, AMR told me that they would continue the topic coverage area, but I highly doubt they'll be able to replace Mark's level of interest and knowledge in the subject, at least in the short term.

When there's a hole left by a lack of analysts, journalists, writers, bloggers or other pundits on such a critical subject, you can be sure that someone is going to try to fill-it. Jim Lawton, who runs D&B's Supply Management group, might just be that person. He recently penned a bylined article on supply risk in Supply and Demand Chain Executive. In it, Jim broadens the topic of risk management to also capture "global supply base insight". This forward looking perspective goes beyond what most providers have to offer the market today. But it paints a great picture for the future.

According to Jim, "global supply-base insight starts by helping companies make better global sourcing decisions by making it easier to find and qualify the right set of suppliers and by ensuring that the information is accurate. From regional supplier directories to detailed and current performance, risk and capability intelligence, global supplier insight can become as indispensable to sourcing and supply management as a stage is to an actor … global supplier insight solutions need to deliver real-time content, analytics, risk management and supplier enablement capabilities. These solutions also need to be offered in a platform-agnostic environment, leveraging existing processes, systems and investments. Like Bloomberg's financial information, which traders and financial managers use to improve their decision-making in the capital markets, purchasing and commodity managers must receive this type of content they way they prefer to digest it, whether pushed to their own desktop or through a specific application or even a designated terminal."

Cool stuff, I must say. But I worry how many more supply disruptions it will take for the market to wake up to the need to make serious investments in supply risk management capabilities, even before taking the plunge into Bloomberg-like global supply insight platforms. My guess is that industries such as automotive and high tech manufacturing which are particular sensitive to supply disruptions -- and are seeing them on a more frequent basis, in many cases -- will be the first to take the plunge.

Jason Busch

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