SC SECURITY & RISK MANAGEMENT
Mitigating the Risks of Distributed
Demand-Supply Networks
Today’s supply chain managers operate in a distributed, networked environment, where multi-
tier process visibility and effective partner collaboration are critical to success. In order to suc-
cessfully balance the risks and rewards of this new environment, companies need to have
much more transparent and responsive supply chains than in the past.
—Viktoriya Sadlovska, researcher, Product Value Chain Benchmarking & Analysis, Aberdeen Group
lthough the new trends in supply chain
management and the evolution of supply
chains into demand-supply networks offer
increased opportunities for operational efficiencies, cost
A
sures, one-fifth of companies indicated that increasing risks
were the reason for improving SCM strategies this year. Considering these trends, it is not surprising that formalized supply chain risk management has become one of the
savings and better enablement of the company's business differentiators among the top-performers. In the study, Best-strategy and revenue growth, the drawback of distributed in-Class companies are more than twice as likely as Laggards
networks is in increased risks.
to have a formalized process for managing supply chain
Supply chain risk management has gained significant atten- risks ( 56 percent versus 25 percent, respectively).
tion in recent years, after numerous quality, compliance and
security-related disruptions had shaken even major compa-
The Outlook
nies. However, most companies were still lacking the adequate Increased attention should be paid in the short term to assess-processes and capabilities to accurately assess and manage ing and managing supplier risks, especially during today's
both supply and demand network risks.
period of economic volatility. In the long run, companies
To add to the supply chain executives' troubles, the risks should adopt a holistic approach to managing supply chain
inherent to distributed networks have been greatly exacer- risks, weighing the risks, costs and returns of various supply
bated lately by the high level of volatility in global markets. chain business models and strategies. All factors should be
In the Supply Chain Executive's Agenda 2009 study, the top taken into account, including supply network, demand net-reported pressure driving companies to improve SCM in work, financial considerations and other factors impacting the
2009 was economic and financial volatility ( 40 percent of business overall. All these factors jointly should help compa-survey respondents). In addition to this and other top pres- nies pick the right supply chain strategies and solutions.
