4 Questions with Pro to Know winner Bill DeMartino on Supply Chain Risk Management in 2017
We asked 2017’s Pro To Know Bill DeMartino the most pressing questions facing procurement and supply chain professionals. Here are his must-know nuggets of wisdom.
Interview with Pro To Know Bill DeMartino
How will 2017 differ from 2016 for procurement and supply chain professionals? What are the new challenges and the new opportunities?
The mandate to proactively measure and manage risk continues to move to the fore for supply management. The pressures leading to the growing importance of risk continue to mount. The trend of more adverse weather combined with the political uncertainty exemplified by the Brexit and the US election, are the most conspicuous examples. But, the continued globalization and expansion of supply chain connections makes all of these events more relevant.
The real challenge is knowing what to do, or not to do, in the face of uncertainty, but there are ways to cover your bases. It’s more important than ever to know the vulnerabilities in your supply chain and to know what you will do ahead of time if something goes wrong. If you are aware of the latent risks and armed with action plans to mitigate the consequences, you can minimize the impact of those events.
The good news is that the challenge presents an opportunity: if you are aware of the risks in your supply chain and have action plans for what to do if any of the risks are realized, you are in a position to capitalize on adverse scenarios before your competition, giving you a competitive advantage.
Where do you see the market going in 2017, and what will be the factors driving it?
Supply chains will continue growing in length and complexity, opening them up to more risk. As the pace and size of supply chain disruptions increases, so will organizational awareness of supply chain risk management. The pain and frequency of disruptions will get the attention of executives who previously thought of supply chain disruptions as an unavoidable cost of doing business, and they in turn will start seeing supply chain risk management as a ‘must have’ instead of a ‘nice to have.’
There will also be more market-awareness of what managing supply chain risk really looks like. A surprising amount of organizations still think monitoring the financial health of Tier-1 suppliers is a risk strategy; but, with over 50% of disruptions originating with sub-tier suppliers, the days of that strategy being viable have past.
What is the most important piece of advice you can give to those tasked with tackling risk in supply chains?
The responsibility is yours and you will be judged on the resilience of your supply chain. It’s not a matter of if you are going to face a challenge to your brand, your reputation or your operation, but when. A threat is inevitable, so you might as well be proactive and get ahead of it. Take for example an operational disruption; a good rule of thumb for a disruptive event (e.g. Fire, Earthquake, Tsunami etc.) is that the first one to enact mitigation plans will be the one that turns risk into a competitive advantage.
What’s next for riskmethods in 2017?
Continued growth, expansion into new industries and most importantly helping our customers to build organizational momentum for their resilience programs. The North American team will triple over the course of 2017 with a major investment in extending our customer success team. From a solution perspective, there will be a big focus on enhanced analytics and extending the breadth and coverage of our Risk Intelligence. 2017 will be exciting!
Want to hear more of Bill’s insights? Checkout Bill’s latest blog articles about supply chain risk management and listen to this recording of his recent webinar on moving beyond financial risk.