How to Start a Global Supply Chain Risk Management Program (Part 2)

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. See our first 5 tips here.

Our final tips for getting started with global supply chain risk management (SCRM) programs include:

  1. Thinking about interoperability and integration not just from a systems perspective, but from a process and timing one as well. Ask yourself: What lead times are required to take action? Is information that is valuable “right now” but extraneous tomorrow still important to present? If so, at what level and when? How should it be “pushed” to the user? As it becomes available or in context once a user is logged into a system? Batch-based integration into other systems or information may or may not provide information in a real-time manner as required to provide.
  2. Executive perspective is critical – All initiatives with company-wide impact need to have c-level sponsorship. Since SCRM carries a very big stick, this is usually not a problem to obtain. Nonetheless, don't overlook how to address internal political resistance to a new approach like this.
  3. Don't forget HR – Risk management should be tied to job descriptions and performance evaluations and maybe, more importantly, to train employees.
  4. Be strategic – This is not a Big Bang initiative; it is a journey. Leverage Kraljic's methodology to assess which areas to look at first. Refine your selection by adding revenue impact and sensitivity analysis to make it even better.
  5. Be flexible – Assume that whatever you start out with is going to look radically different in one year. Don’t paint yourself in a corner – risk is dynamic and flexible, learn to behave in a similar way.

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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