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Home » A Risk Maturity Model for the Modern Supply Chain
Analysis

A Risk Maturity Model for the Modern Supply Chain

A Risk Maturity Model for the Modern Supply Chain
February 12, 2020
Gregory Schlegel, SCB Contributor
Analyst insight: To manage tomorrow’s supply-chain risk, companies need a structured, cloud-based roadmap. 

Over the past decade, risk professionals around the world have observed organizational successes and failures to manage and mature their supply chains. As new tools, techniques, methodologies and solutions enter the industry, a foundational structure will help to support and make best use of them. 

These steps offer a roadmap for organizations to establish their risk maturity level, and then build expertise.

  1. Visibility. End-to-end visibility is critical when considering risk. Today’s global supply chains have more nodes, touch points and opportunities for failure, and blind spots will eventually cause harm. Leading companies are digitally mapping their supply chains and developing risk response plans at every node. 
  2. Predictability. As companies develop digital twins of their networks, many exemplars are leveraging that visibility and stress testing supply chains with “what-if” scenario planning. This provides a view of how supply chains might react to disruptions, and a starting point for risk response. It’s also where companies become more proactive in their planning. 
  3. Resiliency. Here, companies are exercising new tools and techniques to identify, assess and mitigate risk — as well as embedding them into daily business decision-making processes. A risk-adjusted culture includes performance measures for visibility, predictability, resiliency and accountability. For some, this is illustrated in risk “war rooms” where companies constantly monitor their supply chains in real time.
  4. Sustainability. Companies are shoring up their organizational infrastructure through new corporate risk frameworks such as Centers of Excellence (COE), Enterprise Risk Management (ERM), Governance, Risk & Compliance (GRC) and other metrics of success such as Time-to-Recovery, Value-at-Risk and Resiliency Indexes. These frameworks, protocols and organizational infrastructures ensure a sustainable approach to supply-chain risk and provide a platform for operational excellence and effective risk management.

Outlook

As companies exercise a supply-chain risk maturity model, we’ll see increased capabilities for identifying, assessing and mitigating risk. These management infrastructures will go on to ensure enterprise-wide resilience.

Gregory Schlegel is founder of the Supply Chain Risk Management Consortium.

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Cloud & On-Demand Systems Supply Chain Visibility Global Supply Chain Management Supply Chain Security & Risk Mgmt Sustainability & Corporate Social Responsibility
KEYWORDS Cloud & On-Demand Systems SC Security & Risk Mgmt Supply Chain Visibility Sustainability & Corporate Social Responsibility
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