Data is the New Oil: Managing financial and credit-related risk
Today’s global supply chains are fraught with financial- and credit-related risks. Here’s how software and online information platforms can help your company overcome these obstacles and create a sustainable supply chain.
It doesn’t take a tsunami, flood, cyber attack or geopolitical instability to disrupt a supply chain. In some cases, all it takes is one Tier 2 supplier to file for bankruptcy—or one plant fire at a Tier 1 vendor’s facility—to reduce the integrity of the entire global supply chain, damage the firm’s brand and send its customers look¬ing for other suppliers. In the absence of an accurate crystal ball, many companies are turning to software and technology platforms focused on credit and financial risk to help them navigate the maze, stay informed and make good decisions.
Supply chain disruption happens
According to the Business Continuity Institute, supply chain resiliency isn’t exactly top of mind for today’s organization. In its most recent Supply Chain Resilience Report (2016), BCI says that 70% of companies surveyed experienced at least one supply chain disruption over the prior 12 months, and that 34% (up from 15% in 2015) attribute those lapses to “disruptions from their external, inbound supply chains.”
“This underscores the strong dependencies of organizations to their suppliers which may prove to be a point of failure if left unmanaged,” BCI points out in its report, which pinpointed loss of productivity, customer com¬plaints, impaired service outcomes, brand/reputation dam¬age, and revenue losses as the biggest problems caused by the disruptions.
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It doesn’t take a tsunami, flood, cyber attack or geopolitical instability to disrupt a supply chain. In some cases, all it takes is one Tier 2 supplier to file for bankruptcy—or one plant fire at a Tier 1 vendor’s facility—to reduce the integrity of the entire global supply chain, damage the firm’s brand and send its customers look¬ing for other suppliers. In the absence of an accurate crystal ball, many companies are turning to software and technology platforms focused on credit and financial risk to help them navigate the maze, stay informed and make good decisions.
Supply chain disruption happens
According to the Business Continuity Institute, supply chain resiliency isn’t exactly top of mind for today’s organization. In its most recent Supply Chain Resilience Report (2016), BCI says that 70% of companies surveyed experienced at least one supply chain disruption over the prior 12 months, and that 34% (up from 15% in 2015) attribute those lapses to “disruptions from their external, inbound supply chains.”
“This underscores the strong dependencies of organizations to their suppliers which may prove to be a point of failure if left unmanaged,” BCI points out in its report, which pinpointed loss of productivity, customer com¬plaints, impaired service outcomes, brand/reputation dam¬age, and revenue losses as the biggest problems caused by the disruptions.
About the Author
Bridget McCrea, Editor Bridget McCrea is a Contributing Editor for Logistics Management based in Clearwater, Fla. She has covered the transportation and supply chain space since 1996 and has covered all aspects of the industry for Logistics Management and Supply Chain Management Review. She can be reached at [email protected], or on Twitter @BridgetMcCreaSubscribe to Supply Chain Management Review Magazine!
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