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Home » Six ways to improve supply chain risk management
Forward Thinking

Six ways to improve supply chain risk management

October 2, 2018
Supply Chain Quarterly Staff
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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:

  • Put risk compliance under the supply chain management function. This will help create a more collaborative relationship between risk compliance managers and supply chain managers.

  • Make risk management part of your company's culture. Review your top four risks as a part of your regular supply chain planning meetings.

  • Design risk responses that fit with the overall culture of your organization. If your company is naturally aggressive, develop fast responses to risk. If your culture is less aggressive, have a risk response that takes more of a wait-and-see approach.
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