Supply Chain Risk: Challenges We’re Ignoring, Solutions We Don’t Know About


There is no shortage of studies on supply chain risk (I co-authored my first one in the area roughly 12 years ago). But, it would appear that procurement and supply chain managers are not taking action based on what they read (or chose to ignore). A study by the faculty in the supply chain/operations program at the University of Tennessee, Managing Risk in the Global Supply Chain, published earlier this summer, begins by highlighting what appears to be a lack of attention being paid to the overall supply chain risk equation, including all of the available solutions (such as insurance) that can mitigate risk.

FREE Research: Customizing Your Supply Chain


  • “None of those surveyed use outside expertise in assessing risk for their supply chains.”
  • “90% of firms do not quantify risk when outsourcing production.”
  • “66% had risk managers in their firms, either in legal or compliance, but virtually all of those internal functions ignored supply chain risk.”
  • “100% of supply chain executives acknowledged insurance as a highly effective risk mitigation tool, but it was not on their radar screen nor in their purview.”

I had the chance to take a close read of the entire study. While I thought it was a bit scattered in focus (it intersperses outside analysis and case examples with its own quantitative sample), it is actually quite a useful piece of work and sheds light on a number of opportunities (including insurance) for mitigating global supply chain risk – although, the research does appear to be underwritten by an insurance provider. The research component of the study itself is based on a sample size of 150 supply chain professionals.

A number of innovative approaches are featured. Consider:

“One recently introduced service was designed for the healthcare industry. Proprietary technology proactively monitors expensive and highly sensitive shipments for time and temperature requirements. If the shipment is in jeopardy, proactive measures, such as re-icing or expediting to same day delivery, are taken. If the shipment is lost, damaged, or delayed beyond the point of recovery, the insurance company reimburses the customer for the full sales value rather than just the cost of the goods.”

Stay tuned as we highlight some of the most important elements from the report.

Discuss this:

Your email address will not be published. Required fields are marked *