According to international supply chain risk management specialist, Gregory Schlegel, supply chain disruptions represent one of the greatest risks facing manufacturers, and a top concern of global insurance providers.
Any disruption in supply chain systems can cost an organisation up to 10% of its shareholder value, and send companies out of business.
“Research shows that if a business is not prepared, even a single small to medium supply chain disruption can cost it as much as R6million.”
“Most companies across the globe are experiencing an average of seven to ten supply chain risk events a year – from port congestion to poor supplier performance and changing weather patterns. It equates to an annual cost of R60million.”
Hence it does not come as a surprise that a quarter of all organisations going through these moderate to severe supply chain disruptions go out of business around 18 months after the event, according to Schlegel’s research.
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The risks facing modern supply chains can be explained by the exponential growth of supply chain complexity and uncertainty. “With globalisation expanding at a remarkable rate, supply chains have moved into areas where they have never operated.”
Furthermore, the increase in outsourcing and the advancement of multi-tiered global supply networks meant that organisations had to face significant market disruptions and operational and legislative risks.
Gregory Schlegel is a professor at Lehigh University in the USA, a renowned author and founder of the global Supply Chain Risk Management Consortium, comprising of leading multinational organisations that are collaborating to identify, assess, mitigate and manage enterprise risk.
He shared his insights with Southern African supply chain professionals at the first edition of the Supply Chain Risk Management Summit.
The three-day Supply Chain Risk Management Summit the took place from 12 to 14 February 2018 in Sandton, Johannesburg. For more, go to www.scm-risk.co.za.
Read more at source bizcommunity.com.
Dynamics 365 for Operations, previously known as AX7, is a single software system that helps run businesses more effectively. It is a digitally transformed financial and operational ERP system for medium and large organisations.
Microsoft Dynamics for Operations
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