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Worst Supply Chain Risks

Based on the findings of an AMR survey, supplier failure, strategic risk, and natural disaster round out the top three supply chain risks that are most prevalent and most damaging. As this article by Robert Malone of Forbes.com goes on to explain that executives are noticing increases in costs, supplier failure, and energy shortages. What does this all mean for you? Consider your own supply chain and what risks your facing now – are any of them included in this article dealing with catastrophic risks? Have you considered every angle and every potential danger? While you may not face the risks listed in this article everyday – or even every quarter – the truth is you’ll face them at some point. Planning for risk mitigation processes is the single most important element of a risk management plan. But as Malone goes on to say, the new environment of the Supply Chain is also providing new risks: In addition, the survey indicated that supply chain networks are leaner and thus more susceptible to risk. One result of supply chains going global can be lower costs, but accompanying this trend is the reality of longer and more variable supply lines. These trends need to be faced within the context of higher customer expectations, higher levels of expected service and more differentiation of both products and services. The increased cost of commodities and tighter logistics capacity act as a double squeeze. It becomes clear that companies are moving towards leaner supply chains, and supply chain managers must respond by understanding how to better utilize resources, increase visibility, and mitigate both well-known and unknown risks.

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