Supply chain risk mitigation moves to the C-level suite
April 19, 2011 - SCMR Editorial
New mandates for supply chain professionals are coming into play as a consequence of recent disruptions in the global supply chain, said a prominent software industry executive.
According to Kelly Thomas, senior vice president, manufacturing, JDA Software, last month’s natural and nuclear disasters in Japan have resulted in stories of “unthinkable” devastation and human loss.
“Because of that country’s position as a global center of commerce and trade, it has also provided perhaps the most sweeping example of supply chain upheaval,” he said. “This is the latest in a line of headline-making disruptions that only seems to grow ? the economic downturn of 2008-2009, continuing unrest in the Middle East, international terrorism, hurricanes, oil spills, port strikes, and product recalls.”
In an interview with SCMR, he said risk mitigation in the supply chain has moved from being a “compliance” responsibility to a “C-level” obligation.
“There simply has to be an assumption now that ‘black swan’ and ‘outlyer’ events are going to take place from time to time, and multinationals have to be better prepared for them.”
Thomas noted that while it is impossible to foresee every natural disaster, act of terrorism or other supply chain contingency, a consideration of such disruptions must be part of the foundational strategic planning process from manufacturing all the way to the store shelf.
“Predefining the right set of response levers to be activated in the event of supply chain disruption helps prepare businesses to manage supply chain contingencies based on long-term strategic priorities instead of scrambling to make hasty, ill-informed decisions when the unpredictable occurs,” he said.
Jane Fazzalari, vice president, retail industry strategy, JDA Software, added that collaboration is also key.
”The retailer that engages in a relationship based on trust and transparency around cross-enterprise strategies and business planning will be in a much better position to secure constrained supply
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