Supply chain glitches: one of the greatest risks
A glitch in a supply chain can cost an organisation up to 10% of its shareholder value, and even put the company out of business. Supply chain disruptions are therefore widely regarded as one of the greatest risks facing manufacturers and have become a top concern of global insurance providers. This is according to international supply chain risk management specialist, Gregory Schlegel.
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A professor at Lehigh University in the USA, a renowned author and founder of the global Supply Chain Risk Management Consortium, Schlegel will be sharing his insights with Southern African supply chain professionals at the first ever Supply Chain Risk Management Summit, which takes place in Johannesburg, in February 2018.
“Never before has there been such exponential growth of supply chain complexity, uncertainty and risk as we are seeing today,” he stresses. “With globalisation expanding at a remarkable rate, supply chains have moved into areas where they have never operated.
"Research shows that if a business is not prepared, even a single small to medium supply chain disruption can cost it as much as R6m. Most companies across the globe are experiencing an average of seven to ten supply chain risk events a year – from port congestion to poor supplier performance and changing weather patterns. This equates to an annual cost of R60m.”
A sobering thought
Schlegel says that 25% of companies that experience a moderate to severe supply chain disruption go out of business around 18 months after the event. “It is a sobering thought, and not a statistic that we ever read about because few companies or brands want to advertise the fact that they were ruined because they were not prepared,” he asserts.
The Supply Chain Risk Management Consortium that Schlegel founded comprises 20 leading multinational organisations that are collaborating to develop skills, solutions and methodologies to enable businesses to identify, assess, mitigate and manage enterprise risk.
The inaugural Supply Chain Risk Management Summit is being hosted by Bespoke, a leading African contracting, procurement and supply chain management advisory and training provider, in partnership with Southern African supply chain and operations management association Sapics.
“Supply chains are becoming ever more complex, particularly with the increase in outsourcing and the advancement of multi-tiered global supply networks. More and more organisations are now faced with direct and continuously evolving operational and legislative risks as a result of market disruption or malpractice in their supply chains,” comments Bespoke CEO Andrew Hillman.
The three-day summit takes place from 12-14 February 2018 in Sandton, Johannesburg. For more, go to www.scm-risk.co.za
