Trade and Global Sourcing Summit: Cascading Risk Impacts — Egypt and Beyond (Dispatch 5)

MetalMiner is capturing the play-by-play on the live panel focused on risk at our event on trade and global sourcing. For example, at 10:06 am (CT), Dan McGroarty noted "the concept of 'Harmonic convergence' -- we understand there's no reverse movement on globalization. [However we as] elites move forward, but the public does not offer that [much] room to move, and that requires education and leadership to create space for the positive reform." This policy / population disconnect is fascinating indeed.

As an aside, here's a snapshot from left-to-right of the second panel: Lisa Reisman, MetalMiner, Jim Lawton, D&B Supply Management Solutions, Daniel McGroaty, Advisor to US Chamber of Commerce -- International Division.

Dom Gambardella just raised the point that we must think about global supply chain risk as much with goods "going out" as "coming in". When risk hits, trade stops, regardless of direction. This is critical as we think of the cascading impact of global policy and affairs, from US/China trade to the revolutions taking place in the Middle East and North Africa. The trouble is, as Dan notes, "Geopolitical risk is only predictable if you can be right in front of it ... we're behind. We have a very hard time understanding how to stay ahead of the curve."

During the panel, Jim Lawton rhetorically stated that from a company perspective, we must all investigate the potential categories of risk that could sink our organizations. Supply side risk is critical, yet we're at the "embryonic" stage when it comes to tackling it. We're not even sure, in most cases, who should have responsibility for it? Should it be a CPO, a chief risk officer or someone within finance? We're still struggling to sort this out.

This is all the more critical, Jim argues, because of the changing skills emphasis in procurement. Historically, procurement was about making sure the line would not get shut down. This was inherently a risk-driven or at least risk-focused job. Then more recently, procurement has migrated to focus on cost reduction, introducing a changing skill set. But the majority of these new people have not made the leap to tackle risk and cost at the same time. Food for risk thought, especially considering the added risk of the globalization of our businesses and the greater complexity of our supply chains.

- Jason Busch

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