Riskmethods: The Cool Risk Management Solution Provider You Probably Haven’t Heard Of

The cool company that you probably haven’t even heard of, Riskmethods delivers risk management that is dynamic, in near real-time, and even forward-looking. It even has a fun user interface. Really, take a look at this screenshot:

Riskmethods

Their solution loads all your suppliers and their locations, shipping lanes, etc., as well as your own company’s locations (as many and as much detail as you see relevant) whether offices, manufacturing, or distribution sites. At the end of the exercise you have your world map with a lot of dots and connecting lines like the one above. The types of tracked factors are pulled in from various publicly available and/or premium content sources and populates your personalized supply chain world view.

Isn’t this great? To me, being able to visualize the “choke points” – i.e. ports, warehouses, redistribution centers, other logistic lanes, critical sub-suppliers and their facilities, manufacturing sites, and so on – in the supply chain, well, that is simply fascinating. Click on the icons, drill down, analyze events, set your alert parameters (to filter out insignificant “chatter”), and along the way perhaps even rethink sourcing decisions to reduce risk exposure before something happens to disrupt supply. If this were my supply chain, this would probably be my default homepage!

Do you have a clear picture of what your supply network looks like? It’s one thing to sit on a list of critical suppliers with various locations, knowing that the products or parts they supply you with somehow wind up in factories and customers’ hands. Buthow did they get there? Any close calls or exposure along the way? In other words, do you have any idea what goes on in your supply base when you’re not looking? You know, in between the site visits and performance reviews, what are your suppliers reallydoing? How are they performing, and what near misses did they avoid? I would venture to say that most companies have only a foggy idea of what goes on.

Riskmethods also has a way to identify first- and second-tier manufacturing sites – giving you the ability to track areas where it is almost certain that you are flying blind.

The questions above – and many others – are on the list of issues addressed by Riskmethods (their name is stylized in all lowercase). Being German (headquartered in Munich), they definitely speak SAP and also collaborate with direct sourcing and supplier management solution expert providers like Allocation Network (also Munich-based) and Austrian firm Pool4Tool. The latter firm has had a US presence for many years now. Both resell the Riskmethods solution.

If it weren’t obvious, you can run any ERP or other solution in conjunction with this tool – SAP is not required. All this tool needs is to be populated with your suppliers (as many as you care to manage) and their various locations (as illustrated above). The tool adds the information about the data points you have entered and filters alerts per your criteria.

As Pierre Mitchell, head of research at Spend Matters, mentions in his piece on risk management back in May, the company is founded by Heiko Schwarz and Rolf Zimmer (Heiko used to work at Xcitec, which was sold to Emptoris, where Heiko and Rolf met) – so they have supplier management in their blood. In their new venture, Heiko and Rolf make use of big data to a considerable degree – with over 300,000 data sources aggregated and added to their solution on an ongoing basis. That’s a lot of data!

Today (August 14) we have invited Riskmethods to a webinar where we will discuss what can be done to understand supply chain exposure to pandemics (the current Ebola issue is obviously front of mind), as well as other risks that are more of a personal nature (crime, violence, geo-disasters like tsunamis) – please join us or view the recording afterwards. What can you do about this issue and similar events that might disrupt your supply chain and/or put your employees and suppliers at risk?

When I spoke with Riskmethods, I suggested that an extension of their business model could be to address in a unique way the corporate “duty of care” concerns (a somewhat paternalistic obligation to take care of employees – e.g. know where they travel and reasonably keep them out of harm’s way). I wrote a separate article on this where you can read all the details, but fundamentally it involves a combination of solutions from Riskmethods (for the supply chain picture and risk information) and Concur (their travel management tool that keeps track of employees’ whereabouts). It doesn’t seem like particularly heavy lifting to tie those two together, and now you can stay on top of where individual employees are as well, should something happen.

With an expanded perspective, there's also a large cloud of third parties to consider, such as your suppliers' on-site contractors, the local equivalent of the deli truck delivering lunch. It’s anyone with physical access to the location in question, as well as the general situation in the vicinity. It depends on your degree of paranoia, of course – and different companies will likely apply different standards. I hope the CDC here in Atlanta has something along these lines!

Note that this is not about getting rid of risk – that’s unrealistic – it is about modeling risk, predicting scenarios, and letting you take preventive action and make informed decisions about how much risk you are willing to live with. Note the product vision graph below – an iterative cycle.

product vision

A tool like Riskmethods makes you wonder what the practical boundary might be for what can be tracked today. This is an area that is only going to get more and more sophisticated as heuristics are applied to data points – as well as closer and closer to operating in real time. Getting alerts via social media a little earlier than your competition could mean that you are first in line when it comes to changing shipping lanes or rebooking cargo.

riskmethods iPad Screen1Screen Shot 2014-08-13 at 4.08.28 PM

But wait, there’s more – you can of course get this info on your iPhone – the same interactive map. It’s great to pull out when you sit down to discuss risk issues with your critical suppliers.

Takeaways

Take a look at what you know about your global supply chain – what might this kind of tool provide? Consider not just the ongoing updates, but also the visualization. This will help drive adoption and change how you think about supply risk.

Pricing is based on the number of suppliers managed, not the number of users consuming the information, so this is a scalable solution. Be creative – reference the Concur example above – the solution can consume all sorts of data.

For further reading on supply chain risk:

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