Are you ready to manage the risk of supply chain disruption?

Fast moving consumer goods!, as the name suggest they move fast out of your shelves and needs to be stocked again, in the speed it moves away from the shelves

Hence supply chain is the heart of fmcg goods and, if at all your scm lets you down you should be ready to manage the disruption. are you ready for the game?

When it comes to global supply chains, the potential for disruption comes in many forms, from large-scale natural disasters and terrorist attacks to plant manufacturing fires, wide-spread electrical blackouts, and operational challenges such as shipping ports too small to handle the flow of goods coming into a country.

Disruptions in supply chain are inevitable, but we should have the back up to face them. With longer paths and shorter clock speeds, there are more opportunities for disruption and a smaller margin for error if a disruption takes place.

IDENTIFYING THE RISKS

Three main sources of supply chain disruption risk has been identified.

• operational contingencies, which include equipment malfunctions and systemic failures

• abrupt discontinuity of supply (when a main supplier goes out of business) bankruptcy, fraud, or labor strikes

• natural hazards such as earthquakes, hurricanes, storms; and terrorism or political instability

MULTI STEP APPROACH TO DISRUPTION MANAGEMENT

•      Obtain senior management understanding and approval, and set up organizational responsibilities for managing the disruption risk management    process.

•       Identify key processes that are likely to be affected by disruptions and characterize the facilities, assets and human populations that may be affected. Key processes typically include new product development, supply chain operations, and manufacturing. Key assets include both tangible assets (property and inventory) as well as intangible assets (brand image, public perceptions).

•       Traditional risk management is then undertaken for each key process to identify vulnerabilities, triggers for these vulnerabilities, likelihood of occurrence, and mitigation and risk transfer activities. This is the heart of the traditional industrial risk management process for disruption risks.

•       Reporting, periodic auditing, management and legal reviews of implementation plans and on-going results (e.g., of near-miss management and other disruption risks) complete the business process for disruption risk management. The audit process . . .  is essential to providing on-going feedback to management and supply chain participants on the performance of their facilities and their compliance with agreed, supply-chain wide standards."