Global Logistics and Supply Chain Strategies - September 2008 - (Page 52)

Won’t the Right Information Avert Any Kind of Risk? BY RUSSELL W. GOODMAN The future is inherently uncertain, but there are a number of information-based systems and plans that companies are advised to consider implementing if they want to manage risk. I t’s tempting to say that in the webbed world, there is no risk that an enterprise can’t avoid or mitigate if it’s armed with the right information. And that seems to be the consensus of most supply chain professionals. Nevertheless, they hedge that statement with a number of qualifiers. Obviously, they say, information has to be accurate to be of value, whether you are concerned with risk avoidance or business continuity. Information also must be complete and germane to a specific risk—a problem in sourcing, production, inventory, transportation or somewhere else. And, of course, timely. Companies depend on rapid-fire, neural-network data transfer today, and it does little good if information is long in coming to the rescue. With costs continually rising and supply chains ever stretching, manufacturers, retailers and others say they are managing more risk than ever before. It’s as if a deal killer lurks in every link. Advanced supply chain modeling, transportation management systems, multiple sourcing and inventory optimization are among the strategies that some companies are implementing to help control risk. Of course, information has to be reliable for any one of these strategies to be successful. “One of the big challenges in supply chain is getting information, the right information, complete and in time,” acknowledges Greg Johnsen, executive vice president of sales and marketing for GT Nexus of Oakland, Calif. “Whether the risk we’re talking about is missing a ship window or not getting the right combination of products to a customer sales point and missing out on a very expensive promotion, what you’re doing is missing out on revenue.” Johnsen acknowledges that you could draw up a laundry list of risks—“How about the risk of getting inferior product or incomplete product to market on time?”— and not include everything. The point, he says, is that any risk, no matter its type or origin, poses an economic threat to a company’s health. That’s especially true if one’s brand is put at risk. Product recalls, for instance, can be very costly and embarrassing, but it’s potentially far more damaging to a company if the equity in its brand is eroded because of some event that was neither planned for nor handled efficiently and quickly as it unfolded. “The benefits are in seeing, managing and controlling all aspects of your supply chain in ways that, for example, avert delays and allow you to ensure your ontime deliveries to customers are made,” Johnsen says. “These can really save you. Information is the key thing.” While it’s very difficult for importers to know everything at all times about products, parts or materials that come from afar, a company’s duty is clear once a problem is known. They must not only pull faulty products off the market but identify any others in the supply chain that might 52 SEPTEMBER 2008

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Global Logistics and Supply Chain Strategies - August 2008 Contents Editorial GL&SCS Exclusive Fast Forward Up Front Cover Story: Free The Enterprise: Busting Silos in the Supply Chain Business Process Management Merits New Look fromCorporate Strategists Ships and Ports Explore Many Ways to Go Green The Right Information Should Help Avoid Any Kind of Risk Industry Voices

Global Logistics and Supply Chain Strategies - September 2008

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