Slashing Supply Chain Risk By Andrew F. Dailey, Geocritical, LLC

Reprinted with Permission, Copyright 2007, Directions Media

Today's supply chain professional faces a dynamic range of natural and man-made risks including hurricanes, earthquakes, avian flu, political unrest and terrorism. Global sourcing and off-shoring reduce a company's visibility and control of issues within its supply chains. Additionally, lean supply chain valuation, just in time inventory, and sole sourcing create networks even more susceptible to environmental risk. Although corporate risk management mitigates potential loss due to these catastrophes, penalties and insurance cannot replace market share, repair harm to a company's reputation, or recover loss of customer confidence.

According to a 2005 FM Global / Harris Interactive Research Survey, sixty-nine percent of chief financial officers, treasurers, and risk managers at Global 1000 companies in North America and Europe considered property-related hazards and supplychain disruptions as major threats to top revenue sources. How can managers understand the potential of these threats to impact their business, avoid disruptions, and recover as quickly as possible from disaster?