Supply chain risks are everywhere, waiting to cause the next business disruption. Supply Chain risks include any event or activity that can affect the timely production, transportation, quality and delivery of goods in safe and saleable condition, or affect the costs of production, transportation and storage, or disrupt other elements of the planning and execution of those activities. In addition, there are risks regarding human safety, legal and regulatory issues, intellectual property rights, counterfeit products, supplier ethical standards, terrorism, theft, piracy, environmental issues, IT security and many other factors that affect supply chain performance. Considering this long list of probable risks associated to a supply chain, risk managers need to be prepared at all times. Also, knowing risk can happen at any stage or level of the supply chain organization, risk responsibility also includes the performance and behavior of logistics and procurement professionals.
Risk mitigation at best should be about prevention, or at worst, rapid response. Some areas where risk managers are falling short are:
Capturing all risk: Risk managers struggle to capture and monitor all potential risks inside their supply chain, risks around their supply chain and those risks that are interdependent with partners or competitors.
Inability to see risk in real-time: Risk managers have no way of seeing the host of external or trading partner ecosystem events and disruptions that are unfolding around their organizations in real time. Getting real-time visibility of events, isolating those that really matter from those that don’t, and seeing how important events relate to a company’s current assets, inventory, conveyances, and customer orders is the first step to managing risk.
Inability to Predict risk: Risk managers are lacking tools to enable them to accurately predict and ultimately avoid or eliminate future risks.
Supply Chain risks are so diverse and so interdependent, it can be difficult to prioritize. Some areas of risk and useful ways of mitigating them are:
Natural Disasters: Companies should recognize that in the case of a natural disaster, there is often no quick turnaround, but there are strategies to recover efficiently if using a digital supply chain.
Financial Condition of Suppliers: Staying up to date with supplier data and paying attention to economic and business trends are just a few ways to mitigate financial risk in your supply chain.
Political Instability: Political risk is the new normal as regulatory changes, tariff polices, tax changes, border disputes in both domestic and foreign domains, challenge global supply chains.
Digital supply chains see current and predicted risks such as weather; earthquakes, wildfires and other natural disasters; terrorism events, labor unrest, traffic jams; commodities prices; and raw material shortages. A digital supply chain can model average throughput, production variances and predict capacity constraints. At TransVoyant we provide our risk insights that enables organizations to monitor, analyze, foresee and remediate a diverse set of global, interdependent risks related to physical facilities, employees, goods in motion, static inventory, competitor behavior and supply chain partners – anywhere in the world. We also monitor the current risk to the enterprise based on the current position of assets, people, shipments, both moving and static and is aware of geo-specific competitor actions and dependencies. Our risk insights deliver value by enabling rapid responses to actual and predicted events and prescriptive recommendations for remediation based on customer specific rules. Using our risk insights, a company’s risks are ranked based on revenue, cost and customer service impacts and there is flexibility to implement customer defined ranking and behavior models. Using TransVoyant’s risk insights provide behavior understanding, visibility and predictability for true risk mitigation.
For further reading on risk mitigation, take a look at our white paper A Revolution in Risk Management.
For more information on our Risk Insights, please email firstname.lastname@example.org , and one of our experts will follow-up with you.