Last month, APQC hosted a webinar on managing the risk of supply chain disruption. APQC'S Mary Driscoll, Experis' Eric Gerner and John Hejka, and Baker Hughes' Mike Miedema looked at how organizations identify and mitigate supply chain risk while maintaining efforts to control costs of materials and services. According to Eric Gerner of Experis, “supplier risk has been identified as one of the most strategic, highest level, and most critical risks out there.”
APQC recently completed a study on this topic. The study results indicate that many large, global organizations are concerned about the risk of serious physical disruption of their supply chains due to high-impact natural disasters, extreme weather, or political turmoil.
Key findings from this study can be found in Supply Chain Disruption: What Your Organization Should Know About Managing Risk in the Supply Chain. Some of the findings are listed below.
- Only 26 percent of organizations have a continuity plan that is sound and meets business needs, or is well managed, which leaves 74 percent exposed to the risk of supply chain disruption.
- Two-thirds of organizations with key supply chain partners in areas known for high-impact natural disasters, extreme weather, or political turmoil conduct formal risk assessments of their strategic/critical suppliers. A little over half conduct formal risk assessments of their preferred/important suppliers.
- Only one-fourth of organizations conduct formal assessments of potential threats, which puts their mitigation strategies at greater risk of failure during an actual supply chain disruption.
Organizations should prepare for potential supply chain disruptions by having a sound continuity plan and conducting formal risk assessments of key suppliers. They should not rely solely on informal procedures to assess potential threats to supply chain resiliency.
To understand more about supply chain risk and methods to mitigate risk, take a look at APQC’s other recently published content:
- Risk Management: Extreme Weather Increasingly Disrupts Global Supply Chains
- Managing the Risk of Supply Chain Disruption : Survey Summary Report
- Managing Risk of Supply Chain Disruption – June 2013 FM/SCM Webinar
- Managing Risk of Supply Chain Disruption – June 2013 FM/SCM Webinar (Slides)