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Are You Trying to Manage Supply Chain Risk While 'Blindfolded'?

Peas and carrots, strawberries and cream, risk management and supply chain management. OK, that last pair doesn't have the same ring to it, but I'm sure supply chain professionals are more than aware of the intrinsic relationship between the two.

Are You Trying to Manage Supply Chain Risk While 'Blindfolded'?

The buzz around supply chain risk management recently is that there is "lots of talk and little action.” I tend to disagree. I believe supply chain managers are constantly challenged to perform along the razor's edge. Excess inventory means a risk of obsolescence, and lean inventory introduces the risk of stock-outs. Both can put a brand's reputation at risk and impact your bottom line. Almost every tactical tradeoff made on a daily basis, whether related to inventory, transportation or production or planning, is based on constraint-based management, with a constant balancing of our appetite for risk and our tolerance to it, and with the target of optimization.

With respect to supply chain risk, the difficulty is that we seem to be trying to work while wearing a blindfold.

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Keywords: supply chain management, supply chain planning, supply chain risk management, supply chain solutions

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