Brown defines "risk" as "nothing more than uncertainty." It can be found just about anywhere in the global supply chain, touching all processes from raw materials to final delivery of product.
Quickly joining Cisco in the initiative were major companies such as FedEx, Procter & Gamble, John Deere, Merck, Intel and General Electric. The wide breadth of industries represented "is part of the value in coming together," Brown says. "The cross-fertilization of practices [can be] used for different supply chains."
Trying to fashion industry-wide standards is "not a rewarding process," says Brown. There are too many consultants and certification bodies already attempting to do just that. "There's a lot of self-interest in developing or proliferating standards and certification," he says. "It's not going to improve the way you do things."
The better path is to compile and document existing best practices, and share them with as wide a membership as possible. "The more we can improve risk management practices in all industries," Brown says, "the better it's going to reflect on our [individual] company's performance."
The biggest barrier to effective risk management today is the ability of most companies fully to document their supply chains, covering the physical flow of goods from end to end, says Brown. Most fail to understand the global connectiveness of their systems, so that a disruptive event in one location can affect every other link of the chain. The Japan earthquake, for example, ended up having a severe impact on the global automotive industry, due to the large volumes of components and materials that were sourced in that country.
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