Consumed with other challenges, many risk managers have yet to make supply chain risk management a priority. Supply chain risk is a top three priority for only 20 percent of risk managers surveyed.
Risk managers have wide-reaching risk responsibilities, and supply chain is one of many issues that need to be addressed. A contributing factor is that risk managers are rarely directly compensated and measured based on their supply chain risk contributions.
Adding to the challenge is that supply chain risk metrics are still immature. As a result, it is harder to quantify the benefits of enhanced supply chain risk management than it is to measure improvements in, say, the number of workers' compensation claims a company experiences.
Marsh anticipates this will change as the supply chain risk management discipline matures. Nevertheless, the urgency to address supply chain risks is clearly increasing. An additional 55 percent of respondents report that supply chain risk is now in their top 10 list of issues.
"In late 2006, supply chain risk moved to our top 10 list of critical risks that the risk manager is responsible for facilitating a risk response plan for," explains a risk manager at a large industrial products and equipment company.
is a senior vice president in the Supply Chain Risk Practice at Marsh Inc. She has more than 20 years experience advising companies on physical and financial supply chain optimization and related risks. Her previous positions include running the supply chain and global trade research practices at Aberdeen Group and Gartner.
(Find the complete Marsh supply chain survey report here.)
April 15, 2008
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