We have a thorough supplier (performance) management program in place — all of our strategic suppliers are appropriately managed and monitored. We don’t have to worry about unexpected bankruptcies, lapses in quality, or shipment delays.
Falser words could not be spoken!
Just because your suppliers are well managed and not likely to be a source of risk unless an external event causes one or more of those suppliers to shutdown or become inaccessible, that doesn’t mean your supplier’s supplier is managed! According to the BCI 2012 Supply Chain Resilience Survey, 39% of analyzed disruptions originated below the immediate tier-one supplier! In other words, the best (tier one) supplier management program in the world is only going to mitigate 60% of supplier-based risks that can be mitigated! Given that, depending on the study, somewhere between 73% and 85% of companies experienced at least one disruption last year (with the average survey respondent experiencing an average of 5), and that 21% of companies suffered disruptions that cost more than 1 Million Euros, can you really rely on your world-class supplier (performance) management program?
So how do you identify and assess sub-tier risks? We’ll get to that in a series of posts on supply chain visibility that will begin this summer, but if you want a leg up on your competition, I would suggest that you strongly consider the forthcoming webinar on Assessing Sub-tier Risks by Resilinc, who will be doing a deep dive into a proper process, the benefits it will produce for your organization, and the high cost of doing nothing in today’s global economy.
You can Register for the webinar, which will take place on June 19, 2013 @ 11am PDT / @ 3 pm EDT, at your earliest opportunity.