AccessMyLibrary provides FREE access to millions of articles from top publications available through your library.
Remember when more than 15 million bottles and cans of Coca-Cola beverages in Belgium were recalled in 1999? Or the recall of millions of Firestone tires in 2000'.) Those incidents are viewed as epic lapses in quality control. They also can be viewed as prime examples of poor management of supply-chain risks.
Supply disruptions can hurt company earnings, cycle times, sales and brand value. Even so, companies are lagging in efforts to apply risk-management principles, long used in the finance industry, to supply-chain management.
One reason is the highly fragmented nature of global supply chains. A Deloitte Touche Tohmatsu report says they are subject to an "unyielding push toward complexity," driven by pressures for innovation and cost reduction and the development of new markets and sales channels.
Doug Engel, head of U.S. manufacturing industry practice at Deloitte & Touche USA LLR said financial risk can be managed through historical data and established protocols. Supply chains, meanwhile, have multiple constraints--points at which no goods get through--that are always changing. That requires considerable data and the means to manage it.
The Supply Risk Management Benchmark Report, compiled by Aberdeen Group and sponsored by D&B, Austin-Tetra, Open Ratings and SAS, surveyed 180 …