10 Tips For Getting Started With Global Supply Chain Risk Management Programs (Part 1)

risk management

This post is based on content from the Spend Matters paper, A Case Study in Global Supply Chain Risk Management: How AGCO Implemented an SCRM Solution to Save Millions. We invite all of our readers to download this analysis and our PRO subscribers to speak with our team about how to build their business case for supply chain risk management program investment.

In exploring AGCO’s success with implementing a global supply chain risk management (SCRM) program, we can summarize our key recommendations to other manufacturers and services oriented companies in 10 tips:

  1. Start to engage with solution providers – Try them out, start to inflict the pain of visibility on your internal stakeholders, teach your organization to act with many blinders removed and adopt a more strategic level of thinking.

  2. Solutions are in a state of flux – Early adopters will likely have to go through radical changes in their programs as this industry matures, but this is preferable to remaining on the sidelines, getting stuck deeper in the old ways.
  3. Heuristics will make a big difference over time – Both in helping to eliminate false positives and also in identifying real issues with greater precision. Aggregated metadata from your third parties, combined with other big data sets, all processed in real time, will drive a change toward solutions that not only show what your supply base looks like but also helps manage risk scenarios and develop mitigation plans of action.
  4. A picture is worth a 1,000 conference calls – Think of a map, showing all your major internal and external business relationships (manufacturing facilities, warehouses and distribution facilities, logistical paths, suppliers and their suppliers, etc.). This simple illustration can quickly rally stakeholders around a common cause.
  5. Good SCRM analysis requires good data – Don’t skimp on the prep work. You know that sooner or later you do need to get to a clean master data management understanding, as well as item level PO analysis. You also need to fully assess your key suppliers and their immediate supply base and product lifecycles. This is a good time to start on that journey.

In Part 2 of this post, we will share 5 additional tips to getting started on the right global supply chain risk management foot. Organizations that want an inside track on building or accelerating a business case for investment in SCRM are likely to find the Spend Matters paper, A Case Study in Global Supply Chain Risk Management: How AGCO Implemented an SCRM Solution to Save Millions, useful in their efforts.

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