•   Exclusive

Risk Management: Welcome to the New Normal

The potential risk of supply chain disruption has never been greater. In fact, it’s become the new normal, say authors and educators Robert Trent and Greg Schlegel. The problem for many companies is that they are ill prepared to handle a disruption should one occur. This article argues for a new set of risk management techniques in a world where heightened supply chain risk has become a fact of business life.

Subscriber: Log Out

Sorry, but your login has failed. Please recheck your login information and resubmit. If your subscription has expired, renew here.

This is an excerpt of the original article. It was written for the January-February 2012 edition of Supply Chain Management Review. The full article is available to current subscribers.

January-February 2012

The potential risk of supply chain disruption has never been greater. In fact, it’s become the new normal, say authors and educators Robert Trent and Greg Schlegel. The problem for many companies is that they are ill prepared to handle a disruption should one occur. This article argues for a new set of risk management techniques in a world where heightened supply chain risk has become a fact of business life.
Browse this issue archive.
Already a subscriber? Access full edition now.

Need Help?
Contact customer service
847-559-7581   More options
Not a subscriber? Start your magazine subscription.

Hurricanes, earthquakes, tsunamis, tornadoes, and billowing ash from obscure volcanoes all have some things in common. Over the last several years each has been featured prominently in the news. And each has had the inevitable effect of disrupting global supply chains. Yet these kinds of disruptions were not on the minds of Astella Pharma executives on June 17, 2009. On that night thieves stole a trailer containing $10 million of the company’s pharmaceutical products from a truck stop in Tennessee. What followed was a harsh lesson in the realities of supply chain risk.

Once the final tallies were made, the actual cost of the stolen product was just a fraction of the losses eventually suffered by Astella. Acting on advice from the U.S. Food & Drug Administration, the company quickly contacted every party in its supply chain, ranging from wholesalers to hospitals, warning them of the stolen drugs. Then, as a preventive measure, Astella withdrew from the marketplace all drugs with the same lot numbers as those that were stolen. Some of the stolen pharmaceuticals required strict climate control (something the thieves were likely not too concerned about), thereby necessitating the return of all product with those lot numbers. The $10 million theft eventually cost the company $47 million, a figure equivalent to 10 percent of its North American sales for that quarter. Welcome to the world of supply chain risk—a world where sometimes the only thing we should expect is the unexpected.

This article argues that the risk management techniques currently in place, most of which are put forth with the best of intentions, may not be sufficient to allow supply chain organizations to attain risk management excellence in a dangerous world. An innovative set of approaches is needed in a world where heightened risk represents the new normal.

 

This complete article is available to subscribers only.
Click on Log In Now at the top of this article for full access.
Or, Start your PLUS+ subscription for instant access.

Not ready to subscribe, but need this article?
Buy the complete article now. Only $20.00. Instant PDF Download
.
Access the complete issue of Supply Chain Management Review magazine featuring
this article including every word, chart and table exactly as it appeared in the magazine.

 

SC
MR

Sorry, but your login has failed. Please recheck your login information and resubmit. If your subscription has expired, renew here.

From the January-February 2012 edition of Supply Chain Management Review.

January-February 2012

The potential risk of supply chain disruption has never been greater. In fact, it’s become the new normal, say authors and educators Robert Trent and Greg Schlegel. The problem for many companies is that they are…
Browse this issue archive.
Download a PDF file of the January-February 2012 issue.

Download Article PDF

Hurricanes, earthquakes, tsunamis, tornadoes, and billowing ash from obscure volcanoes all have some things in common. Over the last several years each has been featured prominently in the news. And each has had the inevitable effect of disrupting global supply chains. Yet these kinds of disruptions were not on the minds of Astella Pharma executives on June 17, 2009. On that night thieves stole a trailer containing $10 million of the company’s pharmaceutical products from a truck stop in Tennessee. What followed was a harsh lesson in the realities of supply chain risk.

Once the final tallies were made, the actual cost of the stolen product was just a fraction of the losses eventually suffered by Astella. Acting on advice from the U.S. Food & Drug Administration, the company quickly contacted every party in its supply chain, ranging from wholesalers to hospitals, warning them of the stolen drugs. Then, as a preventive measure, Astella withdrew from the marketplace all drugs with the same lot numbers as those that were stolen. Some of the stolen pharmaceuticals required strict climate control (something the thieves were likely not too concerned about), thereby necessitating the return of all product with those lot numbers. The $10 million theft eventually cost the company $47 million, a figure equivalent to 10 percent of its North American sales for that quarter. Welcome to the world of supply chain risk—a world where sometimes the only thing we should expect is the unexpected.

This article argues that the risk management techniques currently in place, most of which are put forth with the best of intentions, may not be sufficient to allow supply chain organizations to attain risk management excellence in a dangerous world. An innovative set of approaches is needed in a world where heightened risk represents the new normal.

SUBSCRIBERS: Click here to download PDF of the full article.

SC
MR

Latest Podcast
Talking Supply Chain: The last-mile tech advantage
Last-mile delivery success depends on many aspects of the supply chain to work effectively together, but none is more important than the…
Listen in

Subscribe

Supply Chain Management Review delivers the best industry content.
Subscribe today and get full access to all of Supply Chain Management Review’s exclusive content, email newsletters, premium resources and in-depth, comprehensive feature articles written by the industry's top experts on the subjects that matter most to supply chain professionals.
×

Search

Search

Sourcing & Procurement

Inventory Management Risk Management Global Trade Ports & Shipping

Business Management

Supply Chain TMS WMS 3PL Government & Regulation Sustainability Finance

Software & Technology

Artificial Intelligence Automation Cloud IoT Robotics Software

The Academy

Executive Education Associations Institutions Universities & Colleges

Resources

Podcasts Webcasts Companies Visionaries White Papers Special Reports Premiums Magazine Archive

Subscribe

SCMR Magazine Newsletters Magazine Archives Customer Service

Press Releases

Press Releases Submit Press Release