Daily Archives: July 24, 2014

Could You Be Doing It Right? Part II: Risk Monitoring

In last Friday’s post, we asked if you were doing it wrong. In particular, we mentioned category management, supply chain risk monitoring, and big data, and asked if you were doing them wrong. We noted that even though a number of companies have jumped on these runaway bandwagons, most have yet to grasp the reigns and take control of the wagon and get it on the right track.

Why is that?

Fundamentally, it’s the same reason that there are no world class Procurement Organizations in Asia Pacific — the classic Triple-T problem.

  • Talent
    the organizations don’t have the right talent to properly manage the initiative
  • Technology
    the organizations don’t have the right platforms to capture the right data and support the right processes
  • Transition Management
    the organizations don’t have the right processes in place to handle the necessary organizational shift to properly manage the initiative

Once the talent, technology, and transition management is in place, the organization has what it needs to fully embrace the initiative and take it to the next level. And do it right.

Where should your Supply Management Organization start? By identifying the core capabilities that are required in each “T” category and finding the right talent, technology, and transition management for the initiative, the organization will be well on its way.

In the rest of this post, we’re going to talk about the requirements for an organization to get on the right supply chain risk monitoring track.

Talent for Supply Chain Risk Monitoring

Good risk managers need the following hard and soft skills:

  • Analysis
    On what services, products, components, and raw materials is the organization (most) dependent and which of these are sole-sourced and/or in scarce supply.
  • Mapping and Modelling
    What does the multi-tier supply chain look like and how can it be represented in software?
  • Mitigation Planning
    If a certain raw material, component, product, or service becomes temporarily, or even permanently, unavailable, what other options can be put into action?
  • Insight
    The greatest risk is always where you least expect it. You will need someone with great insight to not only determine what types of risk you may face, but how your organization can most effectively monitor for them.
  • Sportsmanship
    You will need a great team player to bring it all together.
  • Crisis Management
    When the proverbial sh!t hits the fan, and the organization goes into panic, you need a strong, level-headed crisis manager to get them back on track quickly, and without loss.

Technology for Supply Chain Risk Monitoring

Appropriate technology platforms for risk monitoring will have at least the following features:

  • Supply Chain Mapping
    the platform should map your supply chain multiple tiers down to the source raw materials for any raw materials you are dependent on
  • Event Monitoring
    the platform should identify any natural or man-made disasters that can disrupt your supply chain
  • Mitigation Planning
    the platform should allow the risk manager to put together plans of action should any required part or raw material become unavailable
  • Response Management
    the platform should allow the incident management team to manage the response to a disaster when it occurs
  • Mobile Interface
    as people need to be able to access the platform from anywhere, wherever they are, as the disaster could take out your primary offices

Transition to Supply Chain Risk Monitoring

In order to transition to a proper supply chain risk monitoring framework, the organization needs to hire someone with good change management skills and give that person the tools and C-suite support he or she needs to get it done. That person also needs to be a natural born leader and someone who can work with teams to get it done.

This isn’t a complete (laundry) list of what is required for proper supply chain risk monitoring, but it’s a good starting point. Get the right talent, technology, and transition management in place, and your organization will be well on its way to risk management success.