New Supply Chain Risk Management Guidelines to help avoid disasters
For many years organisations have used contingency
plans to mitigate the worst effects of a potential supply risk. However, with
companies now requiring ever-greater flexibility, shorter lead times and
reduced inventories from their long-distance, global supply networks the
probability of a supply failure has become heightened.
There is a growing recognition that organisations need to adopt a more structured and robust approach to risk management to ensure their business performance and profitability are safeguarded. The realisation that SCRM has now become a key business process was the driving force behind Odette creating a project team of industry experts to develop guidelines on Supply Chain risk management best practice.
The Guidelines, released in June 2014, contain an explanation of the 3-key elements of Supply Chain Risk Management process, including the identification and quantification of risk, the development of mitigation strategies and Supply Chain design to reduce risk.
The Guidelines also contain recommendations on the format and use of a Risk Categorisation Matrix to classify and prioritise supply chain risk, and examples of best practice, methods and tools for proactively measuring risk and reactively managing risk in the event of a supply chain failure.
The Guidelines comprise proven, best practice advice on conducting supply chain risk assessment and management. The content is also specifically intended to help those organisations that do not currently have robust SCRM processes, or have yet to implement SCRM and are seeking a better understanding of the processes involved in order to identify a practical starting point. The Matrix and the Guidelines can be downloaded from here.