Supply Chain Risk and Visibility in the Movement of Goods
As supply chains have become more globalized and complex over recent decades, so too have the challenges and risks threatening their safe and efficient operation.
It can be misleading to suggest that more threats to supply chains exist in today’s world, or that the risks are more severe than in the past.
Rather, as a result of the way supply chains have evolved, disruptions are pushed further through the system and various risks have the potential to cause more intense disruptions.
One such example of this evolution is the adoption of lean and just-in-time techniques over recent decades.
Such methods offer manufacturers and retailers the ability to operate with vastly reduced inventories.
Operating this way, however, cuts the margin for error in supply chains and means a range of natural and man-made disasters at all operational levels can have widespread consequences for production schedules and customer service levels.
Overcoming such challenges is a tricky proposition for supply chain professionals.
While the temptation may be to attempt to insulate the supply chain from the myriad threats and risks, logistics managers must take a wider and more holistic view of how the supply chain fits into their organization and the costs disruptions could cause across the overall organization.
Rather than ‘insulation’, effective risk management strategies require scenario planning and putting processes in place, as well as implementing the technology to sense and respond to events as they happen. In summary, it requires placing risk and visibility at the core of a company’s supply chain strategy to achieve an agile response to risk.
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