“Supply risk is defined as the probability of an incident associated with inbound supply from individual supplier failures or the supply market occurring, in which its outcomes result in the inability of the purchasing firm to meet customer demand or cause threats to customer life and safety”.
Supplier Relationship Management (SRM) is a term that has moved out of the realms of procurement and has taken its place firmly within the supply chain lexicon. The concept of SRM evolved in the eighties as a term referring to a more proactive relationship between organisational buyers and suppliers where buyers understand and document the risks and impact of each supplier in terms of profit and business continuity.
Disruptions across the board from the flow of raw materials to the distribution of end markets have in the last few years challenged the competitiveness and success of even well-rooted industries. In order to continue to harness future growth, organisations need to look beyond the traditional silo approach to doing business and instead seek collective opportunities that expand across various business sectors.
A transport network is the lifeblood of any supply chain. Without an adequate transport network, the entire system will malfunction, failing to deliver freight when and where needed. This seems relatively obvious, and indeed simple, but often such networks are products of history. Over time, organisations grow and evolve. Products lines are introduced or discontinued, markets are entered or exited, and demand is fluid. Organisations that have grown from humble beginnings to large complex operations can have deeply ingrained processes, some of which may well be defunct in the environment in which the organisation operates.
The old adage “Show me how you measure me, I’ll show you how I behave” holds true within any relationship. The metrics against which the success of a supply chain is based should not only monitor suppliers performance but correlate with the strategic requirements of an organisation. Today a vast amount of data is available for every aspect of a supply chain, and this can create confusion if key areas are not focused on for measuring and monitoring. Identifying the data that matters, and extracting it from the noise is vital when wanting to ensure that one’s supply chain is performing as expected.