Don’t Play it Safe When it Comes to Supply Chain Risk Management

The supply chain operation has become fundamental to the success of organizations.

Managing supply chain risk is critical given its potentially far-reaching impact on a company’s business.

But what should companies do to make their risk management initiatives most effective?

A small group of respondents indicated their risk management ROI exceeded 100 percent.

Why did these companies get such outsized returns, compared with the rest of the companies in our survey? We found three key practices that distinguished these leading companies from the rest.

Leaders make supply chain risk management a priority
Sixty-one percent of leaders* consider risk management a strategic imperative for their supply chain organization. Leaders develop capabilities that enable them to gain greater visibility and predictability across their supply chains.

Leaders have greater centralization of responsibility for supply chain risk management
Forty-three percent of leaders have a central risk management function, led by a C-level or vice president-level executive. With a centralized risk management function, leaders plan and react to risks in a more coordinated and efficient manner.

Leaders invest aggressively in risk management capabilities with a specific focus on end-to-end supply chain visibility and analytics
Leaders are nearly three times as likely as other companies to plan to boost their investment in risk management by 20 percent or more in the next two years, while a majority of non-leaders are targeting an increase of less than 20 percent over their current investment.

* Reported their supply chain risk management ROI exceeded 100 percent.