Page 15 - MetalForming December 2013

must find the right balance between taking on additional risk while pursuing cost reductions.
Supply-chain risk management describes an organization’s ability to manage and respond to risks along the supply chain, to ensure the continuity and consistency of flow. Supply-chain risks can be internal (supplier shortage or production failure, cost increases, change in demand or customer preferences, etc.) or external (natural disasters, eco- nomic shifts, political issues, resource availability, infra- structure failures, etc.). However, there are opportunities to mitigate and avoid these risks.
First, identify all of the sources of possible risk.
Second, assess the likelihood and impact of each risk. Third, develop mitigation plans for each type of risk, and
include supply-chain partners in these developments. Finally, define and implement a process to monitor sup- ply-chain risk, using visibility tools, metrics and scorecards. Effectively managing your supply-chain risk can be a competitive advantage, and can quickly have the reverse
effect if you’re not prepared when a disruption occurs.
Develop the Organization
Managing today’s supply chain requires a different approach to developing and aligning an organization and its
talent. Complex end-to-end supply-chain management requires a move away from a typical organizational silo approach as the supply chain evolves. As broader and deep- er skills are required; the challenge becomes finding and retaining talent.
Key attributes of the future supply-chain professional include end-to-end supply-chain knowledge and experi- ence, dynamic leadership, strong analytical and technical skills, business savvy and the ability to adapt and respond to change, among many others.
Moving away from a silo structure to one that can manage the end-to-end supply chain improves coordination and collaboration—within and outside the organization. It also helps reduce costs and improve organizational efficiency.
A step in the right direction: Start by aligning management and the goals and objectives of the supply-chain functions. Organizations often take the silo approach when establish- ing metrics, which can result in competing objectives and an overall negative for the company. When establishing the aligned metrics, ensure you’re taking a total-cost approach.
The author thanks Kim Doyle, a senior consulting manager with Plante Moran specializing in supply chain manage- ment, for contributing to this article. MF
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