More and more companies are recognizing the need to have a robust supply chain risk management program. This is not surprising, considering the fact that last year in the United States alone, there were 16 natural disasters that resulted in $1 billion or more in loss and damages.
At the CSCMP EDGE Conference this week, a panel of experts provided a range of advice for how companies could take a more cohesive approach to risk management.
Kathy Fulton of the American Logistics Aid Network (ALAN) recommended that companies think both in terms of mitigation—steps they can take to reduce a risk from happening—and preparedness—having a plan of what to do once the risk has occurred.
As an example of mitigation, she pointed to a Walmart distribution center in North Carolina that did not experience flooding during or after Hurricane Florence because it had built a dam system around the facility. Walmart had also taken preparedness steps that included having contracts in place for high-water vehicles that could be used to reach flooded facilities.
Shawn Winn, chief operating officer, of the consulting firm Supply Chain Visions Inc., said that companies need to create a portfolio of risks they face. These should be categorized based on whether the threat is a strategic risk, an operational risk, a physical risk, or a financial risk.
Other tips included: