From Toyota to Trump: Our Top Risk Management and Compliance Posts from 2016

Wherever there is a supply chain, there is risk. Whether that risk is a result of natural disasters or a sub-supplier’s labor violations, uncertainty and surprise are a central element. We started out the year with big headlines in the world of supply chain risk. In January, a fire at an Aichi Corp. steel plant in Japan led Toyota to halt production for a week, which was likely to hurt the company’s sales by more than 80,000 vehicles.

Learning from Toyota

“What’s interesting is that in this Reuters article, Toyota defended its overall supply chain design regarding locally sourced materials,” Pierre Mitchell and Lisa Reisman wrote in What Toyota’s Latest Supply Risk Event Teaches Us. “It’ll be interesting to see how well alternative steel supply sources can be tapped in the short term.”

Mitchell and Reisman went on to break down five supply risk lessons that we can learn from the Toyota supply chain disruption. “Have a supply network model that captures the reality of your supply chain,” they suggested. “Toyota learned about part dependencies the hard way back in 1997, when a fire at supplier Aisin Seiki knocked out supply of Toyota brake valves, leading to non-production of 70,000 Camrys. But, in this case, it wasn’t just a tier 3 or tier 4 supplier; rather, the supplier was Toyota itself. (Aichi is a Toyota subsidiary.)”

Risk Never Goes Away

Another popular risk management article from this year was 5 Critical Supply Risk Mitigation Principles for Your Sourcing Process, from Pierre Mitchell and Michael Lamoureux.

The aforementioned Toyota headlines are pretty tame in comparison to other supply risk news that we’re hit with every year (think food recalls or human rights abuses). Part of the reason for these repeated headlines is that risk never goes away. In Mitchell and Lamoureux’s words, “risk management, and what is necessary for ongoing risk management, never gets operationalized, and as new suppliers get added, supply shifts and supply chains change, new risk enters the picture.”

Compliance Matters

This year Xavier Olivera, executive director of Spend Matters Latin America, wrote a three-part series on e-invoicing practices in Latin America, where government requirements can vary significantly from country to country. In the series, Olivera gave rundowns of e-invoicing requirements for select countries, particularly helpful if your organization operates in multiple countries in Latin America.

If you missed them, check them out below!

Preparing For the Next President

Surely you didn’t think there would be no mention of Trump! A new presidency makes for new potential regulations and considerations for procurement organizations, not to mention you – our readers – really liked reading about Trump.

The day after the U.S. presidential election, Spend Matters founder Jason Busch offered his take on how a Trump presidency may affect environmental, trade and tax policy in President Trump: Procurement, Supply Chain and Policy Perspectives, which sparked a good discussion in our comment section.

Want to get a head start on preparing for supply chain risks in 2017? Register for our webinar on the coming year’s top 12 supplier risks.

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