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Supply Chain Risk Management – Shedding light across the value-added chain

with Christian Buechler, GRC Expert der avedos GRC GmbH

Increasingly complex organizational environments, progressing digitalization and new, sustainable business models have posed major challenges for companies even prior to the COVID-19 pandemic. The overall scope and impact of this ongoing crisis have exposed great weaknesses in the way that organizations are set up, how they operate, and how they are prepared to manage risks.

A holistic, enterprise view of a pandemic with its colossal effects on companies, society and politics around the world has never existed until now. Currently, corporate efforts are focusing on how their operations can overcome the current crisis. As soon as the conditions become somewhat more stable, the attention will quickly shift to reviewing and modernizing crisis management.

Was the company adequately prepared to face the challenges of this pandemic? Were proper actions taken? Most of all, what actions must be taken so that the company is ready to face the next crisis? How can the company strengthen its resilience?

Crucial importance of supply chain risk management (SCRM)

Enterprise risk management must extend its reach so that environmental, health and global supply-chain risks play a more significant role. Should one of these risks occur, there must be a fast, targeted, consistent response. Accordingly, the function of supply chain risk management (SCRM) will become increasingly important in companies.

The Association for Supply Chain Management, Procurement and Logistics (BME) and the Fulda University of Applied Science have conducted a joint survey as part of an in-depth study on the status quo of risk management within supply chains across Germany, Austria and Switzerland. Their BME 2020 Logistics Survey examined the topic of supply chain risk management, from its basic functions and effectiveness, and provided a thorough assessment of its maturity level, developmental potential as well as its contribution to overcoming the COVID-19 pandemic. 

This crisis has clearly revealed the weaknesses of global supply chains and the need for mature, sustainable SCRM. The study also shows that companies have established many individual components but lack the necessary structures and IT systems for integrated SCRM. Only 20% of the responding companies have a separate, central function that is responsible for SCRM. This means that they lack not only the necessary transparency on the current risk situation across the entire value-added chain but also the ability to coordinate early responses to overcome critical risks.   

Effective, efficient supply chain risk management can be pivotal in making the risk situation across the global supply chains more transparent. Innovative, integrated IT solutions such as risk2value can process all available risk information and deliver a reliable foundation for decision-making in times of crisis. Through the software’s simulation and stress-testing capabilities, risk scenarios can be evaluated so that the proper control measures based on supply chain risk management can be initiated in the early stages. 

BME logistics survey 2020

Driven by the grave impact of the COVID-19 pandemic, SCRM will gain importance within the corporate organization and its maturity level will rise significantly as well. But until that time, there is still considerable work to be done. The findings of the BME Logistics Study 2020 underscore that many companies have much catching up to do in the field of supply chain risk management. It is time to close this gap for good.

Would you like to receive the results of the BME Logistics survey? Contact us and get it for free!

We hope that this informative research and its innovative approaches provide inspiration on taking your supply chain risk management to the next level. 

The GRC platform risk2value offers a wide range of possibilities to modernize your supply chain risk management. Simply contact us to learn how your company can get started.

If you have any questions about the BME Logistics Survey 2020, please contact David Hahn.

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