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The Financial Risk Lurking in Your Supply Chain

As Jeffery A. Burchill, CFO of FM Global, knows, the same streamlining that improves your supply chain can also be what leaves it most vulnerable. Just-in-time delivery is exactly what it sounds like, after all. Burchill writes an article for CFO.com about managing these vulnerabilities.

A Penny Saved

When people do not get what they ordered on time, people are unhappy and reputations suffer. Delays are not difficult to ignite either, as problems with one key supplier can bring your otherwise perfect supply chain to a halt. Burchill advocates probing your key suppliers for their resilience, and he believes suppliers will be happy to have the feedback on how to improve their risk management. The supply chain needs to be asked the following questions at least quarterly:

  • What don’t we know about our supply chain that we need to know?
  • Are we relying too heavily on single suppliers for important components?
  • Are we focused too heavily on cost reduction, making our supply chain brittle?
  • What could a closer look at our analytics tell us about these and other hidden risks?
  • What exactly are the other risks we might be facing?
  • Which particular risks are most insidious?

When you monitor yourself and your suppliers with equal gusto, you best protect your finances. You can read the full article here: http://ww2.cfo.com/supply-chain/2015/02/financial-risk-lurking-supply-chain/

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