Risks in extended value chain greatest concern in supply chain management Deloitte
Risks in extended value chain greatest concern in supply chain management Deloitte
Pictured: Colm McDonnell, partner at Deloitte Ireland
Almost two-thirds (63pc) of respondents to a new survey from Deloitte identified risk in the extended value chain comprising vendors and customers and where they have less control as their greatest concern with regards to supply chain risk.
The survey of 600 global executives from manufacturing and retail companies, also found that over half (53pc) said that supply chain disruptions have become more costly over the last three years.
As they operate in an environment of escalating risk, 45pc of surveyed executives say their supply chain risk management programmes are only somewhat effective or not effective at all.
“Supply chains are increasingly complex and their interlinked, global nature makes them vulnerable to a range of risks,” said Colm McDonnell, partner at Deloitte Ireland.
“A recent good example of the threat of risk from the extended chain has been those businesses which have been impacted by the identification of equine DNA in food products. It is the increased complexity in addition to the growing number of potential risks which present a precarious situation for companies without solid risk management programmes in place. Quite simply, the importance of adequate risk management programmes has never been greater.”
Executives surveyed recognise the strategic importance of supply chain risk, with 71pc responding that supply chain risk is an important factor in their strategic decision-making.
Nearly two-thirds (64pc) claim to have in place a risk management programme specific to the supply chain. However, only 55pc of surveyed executives think their risk management programmes are extremely or very effective.
According to Deloitte the four important attributes that are critical to supply chain resilience are visibility, flexibility, collaboration and control.
A copy of the 2013 Global Supply Chain Risk survey report can be accessed at www.deloitte.com/ie.