While everyone is concerned about supply chain risk, the pervasive attitude is that there is not a lot that can be done about it - at least, not at a feasible price, he says. Sharpe is out to reverse that line of thinking. "We are encouraging people to recognize that many risks can be mitigated, and you don't have to spend lot of money to do it," he says.

Sharpe says the key is to focus on three basic principles: identify the risk, develop an effective mitigation strategy and then measure activities associated with the risk.  The first stop, identifying the risk, "is not a one-size-fits-all exercise," Sharpe says.  "What a company identifies as a high priority risk will depend on its unique circumstances."

Once risks have been identified and prioritized, a company needs to look at each one and determine the most appropriate and cost-effective risk management strategy, he says. For example, introducing redundancy by adding a supplier or producing a product at more than one facility is a common mitigation approach.  Such strategies might be part of a larger contingency plan associated with that risk, he says.

Having these decisions made by a cross-functional team also is important, Sharpe says. "You need to have all the stakeholders in the company involved in the conversation," he says.

With a mitigation plan in place, the final step is to measure activities associated with the identified risks, he says. Competitive Insights offers a cloud-based performance management solution that helps companies use their transactional data to make fact-based decisions around profit, cost and risk, he says. "Our approach to risk management is to enable our customers to make better decisions in that area of their business."

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Keywords: supply chain risk management, supply chain management, identifying enterprise risk