Finally, general business media are writing about what we at APICS have known for a long time: Supply chains are increasingly complex, fraught with risk, and require significant attention from senior management. This week, the Financial Times ran the story “Broken Chains in Dire Need of Repair,” which highlights supply chain risk__as varied as tsunamis, horsemeat contamination, floods, and strikes.
The author, Mike Scott, interviewed many experts, including Jennifer Bisceglie, president of supply chain consultancy Interos. “There are two types of organization__those that have been hit by supply chain disruption and those that do not know they have been hit,” she says.
The experts quoted in the article credit supply chain expansion in the last decade to the world’s economic growth and increasing populations as well as global connectivity. Then, when the recession hit, companies had to cut costs fast. Many pressured their suppliers for tighter margins.
Scott uses the example of the automotive industry. “Companies were saving money by squeezing their suppliers on costs,” says an anonymous investor quoted in the article. “They become more and more dependent on those suppliers, which were becoming less and less capable, often as a result of what he automotive company was doing to them.”
Another expert suggests in the article that expanded supply chains and more risks call for greater cooperation among stakeholders up and down supply chains. Justin Sherrard, a global strategist at Rabobank, says information sharing is key to that cooperation.
Ready for risk
APICS is taking risk management to the next level for practitioners by studying chronic disruption, which can be defined as “persistent disruption that substantially degrades but does not inhibit supply chain function” or “disruption that does not respond to traditional remedies.” I suspect there are many of you who face this unique challenge.
APICS 2013 will offer a sneak peak at research on chronic disruption in the session, “Chronic Disruption__Managing this Surreptitious Supply Chain Risk,” presented Tuesday by APICS Director of Research Jonathan Thatcher, CSCP.
At APICS, we work hard to be ahead of trends in order to prepare supply chain and operations management professionals for their jobs today and what’s to come tomorrow. Through our certifications and programming, you can access the vast APICS body of knowledge in addition to new ideas in the field. I urge you to register for APICS 2013, September 29–October 1, in Orlando, Florida. If you can’t come, consider checking out a class or seminar in your area. Visit http://www.apics.org/events for more information.