Sending a big shoutout to Supply & Demand Chain Executive, who featured some extensive quotes from me in their article “Your Supplier’s Risk Is Your Risk.”
It’s a truly fantastic article, as it also features some great supplier risk mitigation advice from these other industry experts:
- Brian Winshall, executive vice president of business development, AFN Logistics
- Diane Palmquist, vice president of manufacturing industry solutions at GT Nexus
- Sonal Sinha, vice president of industry solutions at MetricStream
- Biju Mohan, vice president of consulting at GEP
Here’s one of my favorite quotes from the article:
“Every company has a certain percentage chance that it could have an operational disruption of some sort. If a company that independently has a 97 percent chance of performing perfectly does business with a supplier that has a 97 percent chance of performing perfectly, the chance of something bad happening between the two of them is higher than either of the two of them individually. So, with every link in the supply chain, there is an increasing chance that a risk could come to fruition. The longer the supply chain, the higher the mathematical risk. Knowing the risks of a disruption to supply continuity, knowing the likelihood of those risks and developing an appropriate plan for mitigating those risks are the foundational aspects of supply risk management.”
Supplier risk mitigation is one of those activities that is absolutely core to procurement. It is doing whatever is necessary to ensure an uninterrupted flow of needed goods and services into your organization. Though cost savings tends to be a more popular #1 procurement metric, supplier risk mitigation is at least as important. Maybe more. Because an organization may be able to survive while paying too much. But it definitely won’t survive if it can’t get goods and services delivered on time.
In closing, I recommend that you check out the article and never stop learning how to get better at supplier risk mitigation.