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12 April 2013 | Anna Reynolds
Supply chain professionals need to consider government debt and cyber threats in risk management, according to a new report by the Supply Chain Risk Leadership Council (SCRLC).
The study, Emerging Risks in the Supply Chain 2013, identified the risks that will have a major impact on businesses and encourages planning to improve resilience against climate change, gender imbalance, dependence on IT, government financial crises, social media threats and population growth.
The council warned companies that hyper-inflation could devalue investments in a specific country and wipe out savings from operating there because of higher production costs. In addition, the report suggests businesses implement programmes to address deterrence, international engagement, incident response and recovery policies to combat cyber threats.
The creation of ‘mega cities’ – areas that have grown beyond a population of five million – are another challenge for supply chains as transport systems tend to focus on people rather than freight. The report recommended companies take a new approach to logistics to keep costs down.
The paper was prompted by recent events, including the horse meat scandal in the UK and super storm Sandy in the US, which have highlighted the need for greater transparency to be built into supply chains.
Alongside the report, the SCRLC has developed a free risk-analysis tool – the Supply Chain Risk Maturity Model. The model is made up of categories linked to a company’s ability to manage its supply chain, including leadership, planning, implementation, evaluation and improvement. Each of these is assessed on a five stage rating scale – reactive, aware, proactive, integrated, resilient – and bespoke advice is given to businesses on this basis.
Nick Wildgoose, chairman of the SCRLC and global supply chain product leader for Zurich Insurance Group, said: “The council is offering these tools to foster improved practices in supply chain risk management. We hope they will enable organisations across a range of industries to move forward in creating resilient supply chains.”
The tool is available on the SCRLC website.