Thinking about the unthinkable can ensure your supply chain is strong.
While 90% of the companies recently surveyed by APQC said they have an enterprise risk management (ERM) strategy, most have less than three years of experience with it, and only 17% of the companies said risk management was "greatly integrated" into their strategic planning. "The biggest risk in many organizations is simply not accepting the internal message that bad things might - and in fact will - occur," says Mary Driscoll, senior research director for APQC.
Looking both inside and outside your organization, smart supply-chain risk management strategies will build your company's supply-chain resilience.
Begin with a Map
MIT's David Simchi-Levi advises mapping your suppliers, and their suppliers, to understand capacity and sourcing redundancy throughout the true supply network. Then ask yourself some of the following questions:
For your company's supply chain to be resilient, the CEO and other high-level company leaders must be closely involved in risk management at all times, support the risk management strategy, and continuously talk about how it integrates with the company's business strategy. APQC's Driscoll says, "The true ERM leaders ensure that the conversation does take place, that the organization thinks the unthinkable. Indeed, the best-practice partners in this study made a priority of opening up the debate and discussion, thus making all managers risk managers and ensuring that all plausible risks are considered."
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