- With supply chain risk at a 24-year high, The Chartered Institute for Procurement & Supply (CIPS) launched an online risk-assessment tool to help professionals build resilience, Supply Management reported Wednesday.
- The Institute identifies seven categories of supply chain risk to consider: legal, governmental, ethical, geographical, functional, performance, and technical.
- The tool consists of a series of yes-or-no questions leading to the generation of a report detailing supply chain strengths and weaknesses.
Benchmarks within industries are a useful means of gaging standards and understanding where a business falls within the spectrum of safety, preparedness, and risk. By understanding where certain types of weaknesses are likely, a supply chain manager can begin to take action to strengthen soft spots.
The CIPS tool's broad categories of supply chain risk, which can be aggravated by internal and external forces alike, may be disheartening, however. Risk can be anywhere, and likely exists in far more places than originally imagined, so it may be tempting to just ignore problems.
Yet, the true value of the tool is not just in identifying myriad risks, but lies in how it highlights the importance of resilience and planning above hard investments. A plan for warehouse fires, storms, shifts in tax plans or even cyber-attacks can go a long way in mitigating costs. In other words, building resilience and agility is the best way to adapt to seemingly inevitable risk.