What to Consider When Implementing a Supply Chain Risk Management Program
Creating risk management strategies that focus on everyday events is critical. Dealing with these events in a reactive and piecemeal fashion is inefficient and ineffective and can significantly hurt your company.
An increasing number of companies have implemented supply chain risk management programs. At issue is that companies tend to focus these programs on developing risk management strategies to mitigate and cope with cataclysmic events and not the day-to-day bumps in the road. Because of this, companies tend to be ill-prepared to handle everyday risks such as cashflow contingencies, client credit risk and default, competitor interruptions, inventory risk, data backup and recovery, key client attrition, employee satisfaction and retention, social media use and abuse, and reputation recovery. The reality; however, is that when companies are ill-prepared for and/or ignore these risks they do so at their peril.
Creating risk management strategies that focus on everyday events is critical. Dealing with these events in a reactive and piecemeal fashion is inefficient and ineffective and can significantly hurt your company. Here is what to consider when developing an effective risk management strategy which focuses on the everyday risks:
- Put someone in charge.
- Define your strategy and make it comprehensive.
- Make sure the strategy is nimble.
- Allocate the appropriate human resources.
- Educate. Take the time to make sure everyone is educated about the strategy. If just one person knows the strategy, it will not be effective.
- Be first. If there is a problem, be sure that the clients hear about the problem from you. When you contact clients, tell them what the issue is and what you are doing to address it. Be clear, concise, and honest.
- Use social media. Social media is an incredible risk monitoring tool. Social media can alert your company of impending events.
A big event might happen. Everyday events happen every day. It is essential that your risk management strategy does not overlook the everyday events.