What Will the Lasting Supply Risk Impacts Be From 2011 Black Swan Events? (Part 2)

Please click here for the first post in this series.

In this post, we'll continue on with our commentary, sharing the remaining three ways we see organizations responding to the supply disruptions in 2011, primarily in Asian-based supply chains (although many of these strategies present additional value in broader and global supplier and supply chain risk management strategies outside of China, Thailand, Japan, etc.). We'll begin with the third way we see company emphasis in the area shifting: focusing on multi-tier supplier visibility and risk management. Such efforts often entail looking at tier two and tier three supplier management risk elements for the first time, including greater awareness of how lower-tier vulnerabilities (e.g., geographic concentration of suppliers) can have cascading impacts.

In these approaches, technology is paramount to not only analyzing data, but to also automate the collection process given the complexities of gathering and sorting through often incremental amounts of information. At the same time, technology is critical to gain a handle on data we rarely used to look at in the context of suppliers, supplier locations and supply chain dependencies (e.g., transportation lanes). Here, an increasing use of newsfeeds, local language information sources, etc. are coming into play for the first time.

In this, our fourth area for consideration, we see organizations investing in content enrichment and third-party intelligence sources that go beyond supplier ratings alone to focus on geographic risk and geospatial mapping of news, real-time threats to individual supplier facilities, etc. Here, both traditional supply risk content players such as D&B (e.g., geographic and country-specific risk analysis embedded in broader supplier risk tools) as well as others such as LexisNexis on the newsfeed and related front have some relevant and related potential and emerging offerings.

The fifth observation we'll make is related to the previous ones, though it could stand alone (and it should). In this capacity, we see some organizations dipping their supplier risk management toes in the water by starting to test new technologies that push the limits of what many-to-many and "social"-based supply chain visibility and management activity can enable (both system/machine and human based), building visibility and economies of scale that traditional risk management tools, communications environments and management approaches can't begin to approximate.

Without question, it is a fascinating time for investment and change in the supplier and supply chain risk management space. If your organization is not considering or beginning to embrace the five ideas we've introduced in this series as well as those proffered by EBN contributor Dustin Smith, on which the original idea was based, perhaps you should be.

- Jason Busch

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