Page 9 - Risk Management Bulletin January-June 2023

RMAI BULLETIN JANUARY - JUNE 2023

SUPPLY CHAIN RISK

MANAGEMENT: WHEN

THE GREATEST RISK

IS OUTSIDE THE

AREAS OF

TRADITIONAL FOCUS

Traditional thinking, on supply chain risk management, of traditional supply chain risk management are the
like this article by Deloitte consulting, focus on pro- largest risk to the corporation. This includes the man-
curement and sourcing strategies. A focus on tradi- agement of demand-side (commercial operations)
tional risk management misses the mark in these un- strategies, the alignment/design of flows for product
precedented times of demand and supply variability. portfolios, talent turnover with aging technology infra-
structure and the impacts of shifts in climate. To miti-
Let’s start the discussion with a definition. The gate risk, look holistically at how to reduce variability
Wikipedia definition of supply chain risk management and improve continuity. Look past the current focus of
is "the implementation of strategies to manage both traditional supply chain risk management with a focus
everyday and exceptional risks along the supply chain only at procurement and supplier management prac-
based on continuous risk assessment with the objec- tices.
tive of reducing vulnerability and ensuring continuity".
However, as we move into 2023, and face the risks Risk Headwinds
ahead, more holistic thinking is required. Here we ask,
Here we share risk factors to consider in the evolution
“Why only focus on supply? Why are other areas not
and evaluation of 2023 strategies.
being evaluated?” Here we share perspective on other
risks facing business leaders, and not in focus for the
majority of compa- Demand-side Risk Factors:
About the author nies, at the start of 1. Unabated Complexity: Over the last decade,
2023. companies perpetuated a myth that product person-
Lora Cecere alization and item proliferation were a necessary part
Founder Accepted practices of doing business. Complexity is like cholesterol: good
Supply Chain Insights. outside of the focus complexity adds profit and growth while building mar-

7