Risks in supply chain going overlooked


Supply chain management is a complex field, with a number of factors that must all be managed effectively. This can lead to problems when companies find themselves with too much to do.

According to a Continuity Central report, companies have largely proven unable to find a good departmental home for risk control in their corporate structure and, as such, processes that should be an area of focus are falling by the wayside.

Analyst finds risks untreated

Continuity Central indicated that KPMG analyst Richard Nixon has seen companies avoid the vital process of risk management. Inspecting the goings on at U.K. firms, Nixon stated that many supply chain professionals choose to believe they are free from the risks of common logistical dangers. He indicated that a culture of hoping to avoid natural disasters is widespread in the industry, backed by a lack of hard and fast plans to cope with such problems.

Nixon has also seen firms avoid inspecting their trading partners for risk, becoming blind to dangers outside of their own structures, the source reported. The age of modern B2B integration and high visibility means that working relationships are quicker than ever, making it more important, and possible, to spread risk management beyond a company's walls.

"For many organizations, supply chain complexity has reached unprecedented levels and they are struggling to cope. Globalization combined with the demands of the ‘I want it now’ society mean that businesses are also increasingly reliant on third-party suppliers. They become so focused on delivery that counter-party risk is overlooked until it becomes too late," said Nixon, according to Continuity Central.

Predictions for the future

Gartner analysts recently mapped out a blueprint for the immediate future of the supply chain field, focusing on how procedures will develop between the present day and 2016. The source gave a warning about the future of risk management. Even though coping with dangers in the supply chain is vital, Gartner's researchers found that few firms have departments dedicated to the procedure. The projection for the state of the market was similar. The source predicted that in 2016, less than 10 percent of supply chain users will have a specific corporate officer meant to manage dangers and ensure regulatory compliance.

Nothing is ever certain in logistics. While companies may operate under the hope or assumption that they are free of dangers, it could require specific attention. Such processes are not a high priority for firms at the present time, a state of affairs that could lead to problems down the line.