Overview:

Recent trends, including outsourcing, off-shoring and lean manufacturing that focus on reducing supply chain costs, can significantly increase the level of risk in the supply chain. Supply chain risk comes in many forms, from natural disasters and geopolitical risk to equipment failure and supply shortages. While some forms of risk are beyond our control, others can be predicted and even managed through the use of supply chain modeling practices and contingency planning tools.

"The data show roughly 43% of firms say they have a policy in place for assessing their risk in the event of a catastrophic event like a pandemic, meaning that nearly 60% do not have effective supply chain risk management policies in place. For many, though, plans are in the evaluation stage. Even more telling is that firms are abysmally unprepared for managing supply risk. Companies should actively work on risk management strategies, from managing supply and logistics risk, and prepare for business continuity and supply chain resilience in the face of any unexpected event."

Mark Hillman, Research Director at AMR Research in Boston, MA

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Corporate Resilience Comes from Planning, Flexibility and the Creative Management of Risk
Originally published in The Wall Street Journal, May 2, 2007. Courtesy of Accenture

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