Supply-chain risk management, in keeping with the very definition of the term, requires an end-to-end view. But an effective strategy must go deeper, with the ability continuously to identify, assess, mitigate and manage risk through the chain, Schlegel says.
He identifies "four spheres" of supply-chain risk: the supply base, demand base, processes (encompassing people, process and programs) and environmental landscape. The last is the largest and newest consideration, he says.
Schlegel's new book was five years in the research and a year in the writing, beginning life as part of his undergraduate supply-chain curriculum. As he was teaching classes, he began to identify an increasing number of articles and white papers associated with the topic of supply-chain disruption. "It led us to focus more attention on capturing those [elements], and put them into a semblance of magnitude and order," he says. It further evolved into material for teaching MBA students at Lehigh.
Supply-chain risk management remains an emerging discipline, Schlegel says, adding that it’s important to distinguish between “a concept and a discipline.” A concept remains an abstraction, while a discipline is more structured and calls for a systematic set of instructions in order that it can be taught. Supply-chain management, accounting and finance are all elements that need to be incorporated into the subject, he says.
Schlegel has devised a model with four stages through which organizations must pass in order to be successful over the next 10 years: visibility, predictability, resiliency and sustainability. Each stage requires at least two years to master.
The model has an “inversely proportional approach,” Schlegel says. “The more mature your supply chain is, the less inherent the supply chain risks are.”
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