Very few large supply chains are ever completely risk free, but they are essential for companies to deliver products in a global market. The focus of supply chain management should be to become more resilient, according to Spend Matters. Adapting procurement strategies for emergency preparedness will allow businesses to handle unexpected circumstances.
Forbes suggests the term supply chain itself is outdated because it implies a slow, linear process without anything happening in another parallel line, and this is not how modern business operates. Manufacturers and suppliers work together with a higher degree of collaboration, which can eliminate entire links from the chain. The word network may be a more accurate way to describe how supply chains are now managed. Supply chains used to function slowly, and companies could get away with waiting until there was a disruption before fixing it and minimizing damage. Now businesses rely on real-time information to prevent disruptions before they start.
However, it's difficult to prevent unpredictable occurrences, and North American supply chain managers are particularly concerned with risk analysis in strategic sourcing. According to a World Economic Forum report, top risk concerns in 2012 were natural disasters, extreme weather, political unrest, terrorism and sudden demand changes. Global managers appeared to be much more concerned with events outside of their control than changes to government regulations, such as import and export regulations.
Increasing supply chain resilience to lessen the impacts of natural or unnatural disasters on logistics, and Spend Matters suggests this is a matter of consistent monitoring and managing instead of optimizing the design of the supply network. Forbes says supply chain managers need to be able to see past the next steps in the process to get a better sense of what is actually happening. Supply chain visibility is critical for minimizing risk and and adapting to unexpected events.
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