The BBC reported today that members of the Unite Union working for Hauliers Wincanton due to strike today at Teesside and North Lincolnshire have postponed the walkout for 24 hours. The last few years have seen the Global Supply Chain at risk from; Terrorism, industrial disputes, financial instability and political unrest.

Unfortunately 2012 seems no different to previous years. So in a world of uncertainty and ever failing financial markets how can we ensure the sustainability of today’s supply chain?

TRM Global believe the key principles to Risk reduction within the Supply chain are: -

1. Perform a supply chain vulnerability audit.

This should include a full assessment of the customer, the process and the materials within the chain

2. Do robust "that could happen" analysis.

Think about and consider all possible scenarios that may cause havoc within the chain and identify the measures needed to negate the threat.

3. Implement a strategic supply chain plan 

Once you have realised the potential vulnerabilities and threats within the chain, its time to develop the plan.  Reconsider inventory positioning, sourcing of raw materials, services, and transportation options to create a more flexible supply chain.

4. Compare the cost of stockpiling inventory against the risk of losing sales and customers

Think about what is your optimum inventory compared to a loss event being realised.

5. Make sure you have multiple transportation plans in place.

Without secondary and terciary options to transportation, the supply chain is vulnerable, consider the news above regarding Wincanton.  How would you move materials and product if the Haulage Company was disrupted? Can the change be implemented in atimely and cost effective manner?

6. Update plans regularly.

Government legislation changes, political unrest, financial instability and other factors need to be identifed on a regular basis.  Do the changes effect the currnet plan?

7. Design long-term strategies

If you only think short term then you will only have short term gain.  Think of the global and regional picture and consider your critical locations, customers, overall capabilities, raw materials, transportation and crisis response effectiveness.

The Global Supply Chain at Risk

The recent Global conference at Davos in Switzerland even agrees that the next major threat to world stability is the risks to the Global supply chain. US Secretary of Homeland Security Janet Napolitano has issued a new call for global co-operation on supply chain security.

Discussing the new National Strategy for Global Supply Chain Security at last week’s World Economic Forum in Davos, Switzerland, she said the Department of Homeland Security (DHS) was committed to protecting transport systems from attacks and disruptions, and increasing the resilience of global supply chains. “We must continue to strengthen global supply chains to ensure that they operate effectively in time of crisis, recover quickly from disruptions and facilitate international trade,” she said. “We look forward to working closely with our international partners in the public and private sector to build a more resilient global supply chain.”

To see the full report on Global risks for 2012 see our downloads page.