Factorialist

Supply Chain Risk – An Unseen Threat For Business Continuity

Until few years back people did not know that Business Continuity was a kind of management. They were also unaware of the fact that disruptions in supply chain process would prove to be detrimental to economic health and commercial well-being. The topic of Business Continuity came up in the political and corporate agenda due to the ‘millennium bug’. The Supply Chain Vulnerability became a burning political issue after foot and mouth disease of livestock broke out in UK and protestors blocked many oil refineries. The Cranfield School of Management’s Centre for Supply Chain Risk and Resilience started a research, which is a three-year program and is funded by the government.

Supply Chain and Awareness on Supply Chain Vulnerability

It is important that great awareness is raised regarding supply chain vulnerability since it is a threat to business continuity. Along with this, there is the need of developing high end methodologies so that supply chain risks can be identified well. A managerial tool-kit is also developed so that supply chains could be managed in a better manner.

The phrase ‘supply chain’ has varied dimensions               nowadays. In the modern context supply chain will include many organizations which compete against one another and are in collaboration with one another. It depends on the skills of the supply chain manager as how he will control the flow of various products and data between the various organizations and also between different countries and continents.

Survey for Carrying out Awareness on Supply Chain Vulnerability

To better understand the subject of supply chain vulnerability, which might act as a threat to business continuity, a survey has been conducted on professionals who are seniors in the supply chain industry. The industry chosen was that of purchasing and manufacturing of high performance military aircraft. The supply chain network in the industry has fiver tiers in the same. There is extreme risk in this industry as there are commercial, political, technological and financial risks involved in the same.

The results obtained from the survey were validated via interviews of other experienced supply chain professionals and experts from various industries like electronics, food and drinks production, healthcare, transport, packaging, automotive parts manufacturing and so on. The conclusions drawn from the interviews were consistent in all the industries.

Results Obtained from the Surveys which were Carried Out

It is believed that the major risks to business continuity are present in the expansive networks of customers and suppliers than in the main company. However, the fact is that Business Continuity Management is focused on an individual firm. This stands true as well when it comes to a general approach to corporate risk management.

It has also been confirmed in the study that supply chain managers have perceptions that disruptions are becoming quite common in the supply chains. This is truly a great threat and danger to business continuity. But managers are trying their best to deal with the matter in the most successful manner. The problem became grave as the managers could not develop any effective risk management tools for the issue.

To understand the problem from close quarters, researchers took closer views of disruptions in supply chain. It was seen that in many places the problems arose because of lack of implementation of principles guiding supply chain management. Along with this, issues like international terrorism and natural disasters are also responsible. Again in many places top level management makes strategic changes without taking into consideration the supply chain implications.

Focusing on Creating Flexible Supply Chains

Understanding the various problems of supply chain management, it is important to get over the issues with some resilient modes. Supply chain professionals should make sure that they should find solutions to the problem in such a manner that they do not hamper the present working condition in any manner.

The author of the article is Evans who is associated with Big Sky Partners Jim Balestra.

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