The Supply Risk Category

Cyber, Political Resilience Rankings Shuffle in Latest FM Global Resilience Index

MBO Partners

FM Global released Wednesday its 2018 Resilience Index. While overall resilience rankings have remained largely unchanged from 2017, cyber and political resilience rankings have shifted. The Global Resilience Index is an annual ranking of 130 countries and regions according to 12 economic, risk and supply chain factors, which include supply chain visibility, supplier quality and rate of urbanization, in addition to the aforementioned cyber and political risk.

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May Resilience Be With You, Because Risk Sure Is

Like all great adventure stories, every one of the “Star Wars” movies is full of risk. The heroes and heroines of the series must overcome seemingly insurmountable odds to ensure that good prevails in the face of evil. Of course, the Jedi have the force on their side. Even a long time ago in a galaxy far, far away, however, success depended on many of the same practices that apply on Earth today.

On Supplier Risk Management, Financial Health Scores and Bad Lettuce

While the scramble to identify the Yuma, Arizona-based romaine lettuce supplier(s) that is the source of the ongoing E. coli outbreak continues, a new and rather apropos report from A.T. Kearney and RapidRatings shows that companies are taking supply chain risk management more seriously. The majority of both average and leading procurement organizations expect to be given more risk management responsibility in the next two years, the report finds. Considering that 83% of all companies believe that it will be increasingly crucial to implement a procurement risk management strategy within the next few years, it is not surprising that many are investing in risk management techniques.

30 Under 30 Supply Chain Star Jordan Haller on Leading ExxonMobil’s Preparatory Procurement Efforts for Hurricane Irma

oil

Jordan Haller knows a thing or two about safety. In 2015, the procurement supervisor at ExxonMobil was named to the National Safety Council’s list of 40 safety leaders under the age of 40 for leading a near loss campaign for his company. And last summer, Haller led ExxonMobil’s preparatory procurement efforts for Hurricane Irma. In the meantime, Haller, who has a bachelor’s degree in supply chain and information systems from Penn State University, also managed to complete an MBA at Louisiana State University. Today, Spend Matters chats with Haller on supply chain disruptions, prioritizing safety and why he expects the internet of things to push supply chain optimization to the next level.

Haven’t Experienced a Significant Supply Chain Disruption in the Past Year? You’re Among the Lucky Few

supply chain disruption

Riskmethods recently commissioned a survey of more than 250 senior procurement executives around the world to see what strategies they’re using to manage risk in their supply chains, and the results were published in a white paper, Procuring Risk: The State of Risk Management and Mitigation in Today’s Global Supply Chain. The report found that avoiding significant supply disruptions is a top priority for senior procurement executives. These events are also not uncommon occurrences, as the vast majority of the survey respondents reported that they experienced at least one supply chain incident in the past 12 months that led to a significant disruption.

How to Minimize Exposure Risk in a Global Food Supply Chain

Spend Matters welcomes this guest post from Megan Ray Nichols, a freelance writer covering STEM topics.

We all live in a global society now — a reality that includes, to a greater extent each year, our entire world’s food supply chains. If you and your business represent some of the critical pieces in this vast and interconnected ecosystem, you need to know you’re doing everything possible to insulate yourself, your product and, perhaps most critically of all, your end users from all types of risk that may introduce themselves along the way.

Resilinc EventWatch Data: Factory Fires and M&A Activity Rank as Top Disruptive Events

supply risk

Resilinc recently released its 2017 EventWatch Supply Chain Disruption Annual Report, and the top two disruptive event types by a significant margin were factory fires and explosions and mergers and acquisitions. The report is based off the 2017 data collected by Resilinc’s EventWatch software, which monitors and analyzes global events that are potentially disruptive for supply chains and then alerts customers. In 2017, EventWatch published on average five bulletins a day.

What the Super Bowl Can Teach About Risk Management

Pause for a moment to consider how adept the NFL has proven itself at proactively addressing logistics and risk management. Whether we’re talking facilities, security, transportation or emergency services, there’s obviously a lot more behind the curtain than we know about. Suffice it to say that little imagination is required to accept that the NFL sets an interesting, if not teachable, example — not just in terms of how to pull off a mega-event but how to react to most anything that could possibly go wrong. It expects problems and is prepared for them.

U.S. Companies are Rethinking Risk Management Strategy After the 2017 Hurricanes

For many large U.S.-based companies, last year’s hurricanes and the damage they brought have been a wake-up call. A survey of senior financial executives at U.S.-based companies with revenues of more than $1 billion, commissioned by FM Global, revealed that the hurricanes have prompted 68% to adapt their risk management strategy for the future.

The 12 Supply Risk Management Disconnects that Destroy Value (Part 1) [PRO]

risk

“Risk” and “risk management” are terms that are like the ultimate Rorschach test in business: they mean many different things to many people. The same applies to the term “value” — and don’t even bring up “supply management.” Even a specific term like “supply risk” has many interpretations (e.g., it’s much more than supplier risk). The problem with this is that if people within a company define various terms differently, then how well will they be collectively managing those areas? Likely not well at all.

Risk management is a strange animal. On one hand, it focuses on “things gone wrong” and hones in on defining and mitigating various external risks that create adverse events in a value chain. On the other hand, those adverse events affect stakeholder-relevant performance (i.e., measurable value). Such performance and value delivery is focused on “things gone right” and reward rather than risk.

The key, therefore, is to realize that risk and reward are inextricably linked. If ensuring delivered value (and improving it over time) from the supply chain and from suppliers is what supply management is all about, then that supply value should not only be expected (i.e., expected value like discussed above) but also protected (i.e., protected value ensured through supply risk management). As a side note, have you ever considered that the concept of “expected value” uses the term “value” even though it is applied heavily to the world of risk management (i.e., calculating the expected probabilities and impacts of various risks)?

Anyway, the imperative becomes ensuring that the most important performance metrics (i.e., KPIs) are protected from risk. Yet these individual KPIs are rarely individually and systematically managed for risk, and the lack of risk-adjusted performance management means that you’re going to be exposed and it will catch up with you eventually. The problem isn’t just bouncing around and applying risk management technique X via tool Y to address risk type Z. There are a dozen fundamental disconnects in most firms that prevent risk management being properly resourced, aligned, managed and improved. Only by unpacking them and addressing them through focused practical interventions can you really get to the root cause issues that are likely keeping your supply risk management efforts suboptimized.

In this Spend Matter PRO series, we will explore 12 critical supply risk management disconnects. This brief, Part 1, focuses on the following four areas:

  1. Risk Scope and Stakeholders
  2. Performance vs. Risk
  3. Risk Type vs. Impact
  4. Risk vs. Cost (e.g., “cost of risk”)
If you’re a practitioner, you should be able to see which disconnects are the biggest issues for you and make yourself more resilient (i.e., ability to mitigate and recover from risks) and predictably high performing. If you’re a consulting organization, you’ll probably find some pointers to improve any methodologies that you have here. And if you’re solution provider, whether in the supply risk management area, or more broadly, you’ll hopefully get some ideas on how to address more strategic pain points.

Trends in Cybersecurity Risks: Will 2018 See More Indirect Supply Chain Attacks?

cyber attack

2018 may be the year we see more indirect supply chain attacks and compromised industrial control systems, according to a new report from consulting firm Booz Allen Hamilton on trends in cybersecurity risks. In “Foresights 2018,” the report authors outlined nine predictions on what may happen in the world of cybersecurity this year, from outsourced hacking to supply chain infiltration and cryptocurrency theft. We’ll look at a few of these predictions in this post.

Hurricanes, Geopolitics, Cyberattacks and More: Top Risk Posts of 2017

As far as risk goes, if 2016 was characterized by political turbulence, then 2017 was all about disasters, natural and manmade. This past May saw a worldwide ransomware attack that hit more tha 300,000 computers in 150 countries, disrupted hospitals and manufacturing plants, and caused economic losses that are estimated to be in the billions. Then there were the Harvey and Irma hurricanes of late summer and the ongoing California wildfires. And we haven’t even mentioned geopolitics, commodities, finances and all of the other risks out there that need to be on procurement’s radar these days. As part of Spend Matters’ year in review, here are the top risk posts from 2017 that you don’t want to miss.