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

03/15/2018 By

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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.

As the graphic below indicates, 13% of respondents experienced 20 such incidents or more, and 12% did not know this information, which suggests that visibility into their supply chains is considerably limited.

Source: Riskmethods

Monitoring, of course, is a key component of any good risk management program, yet only a third of the survey respondents said they track risk information “continuously.”

The survey also asked the executives whether their process for updating risk information is automated. Seventy percent reported low to medium automation levels, while a quarter of respondents used no automation at all, relying on time-consuming manual searches.

Given how common supply disruptions are, having a structured risk mitigation plan is a crucial best practice. Around 20% of respondents said that they have such plans in place, while another 53% have partial plans.

But when it comes to having a mechanism for measuring supplier criticality, many procurement organizations fall short. Only 20% of survey respondents said they have both a qualitative assessment of supplier criticality and a structured quantitative assessment of supply chain-related financial impact. Approximately half of the survey respondents do not have either.

Check out the full report here