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Effective Supply Chain Risk Management in Crisis

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Peru Consulting 2 Jul 2020 Time to read: 

For many organisations, Supply Chain Risk Management has been an undervalued activity, perhaps part of a wider supplier classification exercise and, for some, a means to an end but where the end was keeping the auditor at bay. Experts in this field, however, realise that the real power is in mitigating risk, not just keeping the audit teams happy.

Along came the Covid-19 pandemic and turned this logic on its head, perhaps forever. Proactive supply chain risk assessment is now critical to keeping businesses up and running, especially when it may be uncertain whether a critical service provider or manufacturer in your supply chain will still be trading next week. In organisations that do not put supply chain risk higher up the agenda, the chance of missing failures such as the sudden collapse of Carillion two years ago is much higher.

Of course, it’s not quite as binary as that. The impact of disruption can also be measured in terms of impacts to the time, cost and quality of supply chain service or product delivery even when your suppliers remain solvent.

OK so you think you might have a problem, but how do you get concerns regarding supply chain risk higher up the agenda when there are 1,001 other urgent, real-time priorities to deal with.

One solution might be to rush out a tool to conduct a Supply Chain Risk Assessment, perhaps backed up by some bright people…many have. However, this approach overlooks two of the most fundamental challenges with supply chain risk assessment, namely the lack of time and focus and that’s where Albert Einstein comes in:

“Given one hour to save the planet, I would spend 59 minutes understanding the problem and one minute resolving it.”

At Peru consulting, we have applied our combined experience and expertise gained over many years to help organisations address this problem.

Peru’s Supply Chain Risk Assessment advisory service, supported by our advanced, adaptive software solution, helps you focus on what really matters when time is of the essence. Our approach is broken down into 3 main Stages:

  • Stage 1 – analyses the influence of your supply chain in terms of their potential impact on your revenue, profitability, and outputs – Focus established
  • Stage 2 – analyses the quality of the risk assessment questions to ask and the availability and reliability of the answers – Key Lines of Enquiry established
  • Stage 3 – completes the risk assessment based on the right questions for the right suppliers, which in turn drives a prioritised mitigation plan for stakeholders to implement – Resolution established

To find out more about how you can proactively enhance your ability to track & act on your key supply chain risks, focus finite resources on the suppliers most critical to your business and gain the clearest insight on risks in your supply chain, please get in touch.

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