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Risky Business: Re-Thinking Supply Chain Risk and Resiliency

In the nineties, supply chain professionals were living the high life. They took more risks, expanded operations, and performed Just In Time (JIT) deliveries across the globe. In fact, everything seemed to be near perfect for some: Everything seemed “just right” as supply chain professionals took on even more risk through initiatives like supplier rationalization (more volume to fewer suppliers for greater cost reductions), larger centralized manufacturing industrial parks, and the consolidation of air and ocean freight carriers. Throughout the '90s, good supply chain people were practically minting money by concentrating on fewer providers doing more value-added work. While most chief financial officers recognized the profitability potential of the next “new product,” they also knew that the current quarter required their supply chain organizations to relentlessly extract pennies from millions of components day in and day out. But, as Rich Becks points out in this article, the tsunami that devastated critical nuclear reactor capacity in Japan struck, geopolitical issues in the Sudan resulted in slow or stolen supplies, and transportation was affected by economic downturn. The new supply chain landscape of the 2000s demanded that risks were addressed more stringently and proactively, involving the entire network of the supply chain.

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