| Supply Chain Risk Management |
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Many companies start realizing that their supply chains are full of risks, and that this topic needs to be managed better. Risks are unforeseen events with negative consequences. In formula: Risk = Probability x Impact. Processes in modern supply chains get leaner for reasons of efficiency. Therefore, we miss the slack in inventory or capacity to cope with disruptions or disasters (e.g. machine breakdown, warehouse burn-out, theft in transportation). Next to that, more and more systems are being used in supply chains to improve the overall performance. This makes us extremely vulnerable for system failures (e.g. connection outage, database crash, server room fire).
How do you manage supply chain risks? Might you feel slightly concerned, MP Objects is open to share our best practices with you. |
How to manage the supply chain risks? Start with an (annual) Risk Assessment, in which potential disruptions are identified, and preventive and reactive controls are implemented. As a next step, a Disaster Recovery Plan (or Business Continuity Plan) should be created across Operations and IT. The DRP/BCP specifies the responsibilities and actions in case of supply chain disasters.
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