Introducing a process for radical supply chain risk management

Today's competitive environment is becoming more hostile than ever and amidst more stringent customer demands, supply chains are competing against each other in ever-increasing volatile environments. As levels of customisation increase, the need for supply chain agility and flexibility across the entire supply chain also increases while pressures to be more efficient are never relaxed. Firms have become more dependent on external supply chain partners as each supply chain member focuses on its own core competencies. These increasing supply chain risks can thus be linked to the internal supply chain and most certainly also to the external market and macro environments of the supply chain. Therefore, supply chain risks need to be managed across the entire supply chain. Many traditional risk management models exist. However, very few of these models focus on the importance of a risk management culture within the firm. This article highlights the importance for firms of having a risk management culture embedded into their risk management strategy by introducing a radical supply chain risk management process to manage risks across the supply chain.