Exploring Supply Chain Resilience: Top Global Supplier Risks

While few supply chains may ever be truly “anti-fragile,” to borrow a phrase coined by Nassim Taleb, there is much that can be done to build greater and greater resilience into our broader procurement and supply networks on a global basis. Understanding the current state of preparedness along with procurement’s top concerns, supply chain and finance executives are a critical place to start for companies as they look to focus limited efforts and dollars on optimal investments to build resilience.

I recently came across a World Economic Forum Report (An Initiative of the Risk Response Network, prepared in collaboration with Accenture) that provides an ideal starting point to understand the current state of priorities and interest in the area. In a series of posts on the topic, I’ll share some of the more salient findings from the report as well as Spend Matters’ own analysis regarding some of the topic areas. We’ll start first with priority variation in North American and European/Asian respondents.

In this geographic regard, “North American respondents had a notably higher level of concern about terrorism than Europeans and Asians … This is reflected in the US Global Supply Chain Security Strategy which points to a broader range of risks affecting supply chains: pandemic effects on border crossings and workforces, earthquake disruptions to mainland routes, bombing of major supply chain nodes, trade barriers to raw material and specialized products and cyber disruptions to supply chains.” Curiously, other risk elements were further down the list. For example, sudden demand shocks came in at fifth (globally). In this area, examples might “include the decline in demand for raw materials for construction after the US housing bubble burst in 2008.”

According to the report, 2012’s top five disruption triggers for supply chains differed slightly from the previous year:

1)     Natural disasters

2)     Extreme weather

3)     Conflict and political unrest

4)     Terrorism

5)     Sudden demand shocks


Contrast this to the rankings in 2011:

1)     Natural disasters

2)     Conflict and political unrest

3)     Sudden demand shocks

4)     Export/import restrictions

5)     Terrorism

Stay tuned as our coverage continues. In the meantime, Spend Matters readers can download the following briefs from our Research Library (free with registration):

Supplier Information Management Technology Fundamentals – Part 1

Supplier Information Management Technology Fundamentals – Part 2

Supplier Lifecycle Management: Reduce risk, Improve Performance and drive Supplier Value

Leveraging Supplier Management Platforms for Multiple Goals: Risk Reduction, Supplier Diversity and CSR

Supply Risk Management – Segmenting the Technology and Content Landscape and Choosing the Right Category of Solutions

Beyond Basic Scorecarding – Supplier Performance and Development Approaches to Drive Competitive Cost and Risk Advantages

Supplier Management Market Observations: Recent Trending, Musings on SAP’s Core Offering and General Deployment Pitfalls (for all Solutions) to Avoid

First Voice

  1. Jon Bovit:

    Thank you Jason. Interesting post. For readers interested in how companies are addressing supply chain resiliency, suggest they check out a case study on EMC at http://www.resilinc.com/case-study-emc/

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