What insights did you share?
Supply chain disruption can erupt at a moment’s notice. From supplier performance questions and quality control issues to transit delays and regulatory concerns, there’s no telling what problem might flare up when. And, as demonstrated by the recent West Coast port congestion, companies that rely on international partners and vendors face additional exposure—think customs and border issues, unstable political and economic situations in sourcing countries, and long lead times. Despite recognizing these risks, many organizations have not taken the necessary steps to protect their supply chains.
What resonated most with the audience?
According to a University of Tennessee study, most companies neither understand nor appropriately manage their supply chain risk. Of those surveyed, 90% do not quantify risk when outsourcing production, and while 66% had risk managers in the firm (either legal or compliance), almost all of those internal functions ignored supply chain risk. Further, of those surveyed, none used outside expertise in assessing supply chain risk.
In terms of risk mitigation solutions, while 100% of supply chain executives acknowledged insurance as a highly effective risk mitigation tool, it was not on their radar screen or in their purview.
What new thinking emerged?
Outside of insurance protection, there are tools available that can help companies protect their supply chains. These tools can largely be categorized into three areas: strategic, tactical and leading indicators. For example, in the event of ongoing port congestion as exemplified on the West Coast, businesses can rely on air freight as a short-term tactic for importing goods. In the long run, businesses should consider making a strategic shift toward near-sourcing. Additional tools include properly evaluating transportation capacity, utilizing predictive modeling and ensuring that the required border clearance documentation has been completed prior to arrival.