Ignore Geo-spatial and Geographical Analysis of Your Supply Base at Your Own Risk

Even though there's not that much content posted yet, D&B recently launched a new supply chain and procurement blog titled Chain Reactions. I've got it bookmarked and look forward to checking in every so often and if you're looking for insights into supply chain risk management, you might want to as well. A recent post, "What's Your Plan for the Unplanned" examines the impact of one supply chain disaster on supplier facilities in a Tornado-stricken region of the country. It also shows how a geographic and geo-spatial (i.e., map/location-based) analysis of suppliers and facilities can be key to rapidly determine the impact of potential disasters on your supply chain -- including tier one and lower tier suppliers.

Consider that in the wake of one recent round of tornadoes, D&B "identified more than 325,000 companies in counties that have been declared disaster areas in Alabama, Georgia, Mississippi and Tennessee." In the wake of these types of Black Swan supply chain events, the post suggests that it's crucial to think through all of the disaster recovery elements necessary to respond quickly and effectively. As the post notes, while it's critical to pave a foundation in advance as part of a supply chain risk management strategy (e.g., "prioritizing suppliers based on criticality; identifying alternate sources of supply and putting in place a 'reaction team' that's ready to go at moment's notice"), when a disaster actually hits, "time and knowledge are the critical factors in response."

To respond effectively in the immediate wake of such a supply chain event, there are a few questions D&B suggests that companies ask themselves as part of their supplier risk planning, such as "how quickly can I access reliable information about the situation?" and "how quickly can I analyze the information to understand how the situation affects me?" While access to information is essential, our own research suggests that the ability to share information internally and collaborate across functions (e.g., a centralized risk function sharing information with materials managers and plant managers) is essential. And when it comes to information sharing, especially around immediate information to surface in the aftermath of an event, there's no replacement for tools that enable the gathering and sharing of both structured and unstructured general content (e.g., news feeds, information shared on social networks, etc.) as well as the plotting of such information using geographic and geo-spatial-focused tools.

As a modified version of the famous saying goes, a picture (i.e., a map) is far more effective at telling the full risk story than a thousand words, or a spend cube that incorporates risk enrichment data or a BI dashboard with a thousand data points.

Jason Busch

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