The global recovery is ushering in a new business climate that will permanently change the way organisations think about and manage supply risk, experts predict.
The global financial crisis has taken supply risk to a new level. More than 75,000 businesses in the US have filed for bankruptcy since the beginning of 2008 and the number is expected to rise again this year. Credit remains extremely tight. And inventory and capacity reductions, layoffs and hiring freezes have reduced suppliers’ abilities to respond to fluctuations in demand.
Companies that take these issues head on and attack risk now will gain not only a valuable insurance policy against disruptions to their business, but also competitive advantage and substantial bottom-line savings. But doing so requires a new approach.”
Firms should not to be fooled that supply risk is receding because the economy is improving. Companies will face more supply risks and challenges than ever before
Organisation need the right tools and processes in place to effectively manage and overcome them such as Including risk management in sourcing strategys. Increasing the frequency of supplier performance reviews. And automating supplier management process.
Traditional, manual, spreadsheet-driven approach traditionally used to manage supply risk “will no longer cut it”. Instead Organisations need to use flexible, technology-based solutions and processes that allow them to respond quickly to changes in market conditions and business needs.
