Executive Briefings

Complexity in Supply Chains Maximizes Risk

Everyone talks about risk in the supply chain, but the increasing complexity of it makes identifying and mitigating risks difficult. In fact, almost half of executives are afraid that their supply chain risk management is only somewhat effective or has no impact at all, according to a recent survey from Deloitte.

"Supply chains are increasingly complex and their interlinked, global nature makes them vulnerable to a range of risks," says Kelly Marchese, principal at Deloitte Consulting LLP, "This increased complexity, coupled with a greater frequency of disruptive events such as geopolitical events and natural disasters, presents a precarious situation for companies without solid risk management programs in place."

Decisions around risk mitigation in the supply chain can make the difference between success and failure, and organizations know it. In counting the costs of risk events, 71 percent of those surveyed for Deloitte's research said that supply chain is an important part of strategic decisions. Poor decisions are likely to erode already thin margins or make suppliers unable to address sudden changes in demand.

A recent EBN poll bears out that this combination of complexity and risk are likely to create confusion in trying to tackle risk management. Readers were asked to identify the single-biggest risk to the global electronics supply chain. The results demonstrated that the industry is widely split on where to focus.

Uncertain economic outlook across the globe was a clear favorite in the poll, chosen by more than one third of those surveyed. However, the ability to find workers with experience and training around supply chain duties was the top pick for 19.2 percent.

Meanwhile, volatile fuel prices concerned another 16 percent, and nearly 15 percent were keeping a close eye on the potential risks created by a variety of global conflicts that includes political instability, trade tensions and war.

Some are skeptical that the global landscape is going to get easier.

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"Supply chains are increasingly complex and their interlinked, global nature makes them vulnerable to a range of risks," says Kelly Marchese, principal at Deloitte Consulting LLP, "This increased complexity, coupled with a greater frequency of disruptive events such as geopolitical events and natural disasters, presents a precarious situation for companies without solid risk management programs in place."

Decisions around risk mitigation in the supply chain can make the difference between success and failure, and organizations know it. In counting the costs of risk events, 71 percent of those surveyed for Deloitte's research said that supply chain is an important part of strategic decisions. Poor decisions are likely to erode already thin margins or make suppliers unable to address sudden changes in demand.

A recent EBN poll bears out that this combination of complexity and risk are likely to create confusion in trying to tackle risk management. Readers were asked to identify the single-biggest risk to the global electronics supply chain. The results demonstrated that the industry is widely split on where to focus.

Uncertain economic outlook across the globe was a clear favorite in the poll, chosen by more than one third of those surveyed. However, the ability to find workers with experience and training around supply chain duties was the top pick for 19.2 percent.

Meanwhile, volatile fuel prices concerned another 16 percent, and nearly 15 percent were keeping a close eye on the potential risks created by a variety of global conflicts that includes political instability, trade tensions and war.

Some are skeptical that the global landscape is going to get easier.

Read Full Article