The game today has changed, from managing risk with deeper supply chain relationships and analysis, to preparing for outright disaster.
A decade ago supply chain risk was primarily focused on supplier failures, commodity price volatility and component shortages. Mitigating these threats was possible with closer supplier cooperation, collaborative planning around upstream constraints, and dual sourcing. The playbook was essentially about identifying potential weak links in the chain and shoring them up with shared ownership of supply continuity.
This is no longer enough. Where once we worried about localized mistakes or oversights upstream, now we worry about cataclysm, potentially at the hands of actors bent on destruction. The new world of supply chain risk means preparation for widespread, systemic disruption in our immediate future.
War and More
The share of supply chain practitioners “very concerned” about war, terrorism or other geopolitical threats is now nearly one in five. This is the same level of worry attached to financial failure of a critical supplier, breach of intellectual property rights and counterfeit products. It is also a huge jump from 2013 when only 8 percent were “very concerned.”
The fear is not baseless. In response to heightened security, terrorism is morphing into vehicular assaults, mass shootings and cyberattacks. SCM World’s London office was shut for a while this past summer after the incident at Borough Market. Geopolitics, meanwhile, is a hotbed of instability, as exemplified by the recent Catalonian independence vote. Trade rules, freedom of movement and currency exchange rates are all subject to swings in this domain.
Timely, incisive articles delivered directly to your inbox.