From risk to competitive advantage – Supply Chain Risk Management at Swiss Steel

In the latest issue of the leading Swiss magazine for procurement, category and supply management, I had the opportunity to write a joined article with Daniel Jung  (Head of Strategic Procurement at Swiss Steel) to share insights on how Swiss Steel introduced a holistic Supply Chain Risk Management approach that ultimately helped the company to change risk into competitive advantage!

I don’t want to miss to give you a short summary of the great success story from Swiss Steel:

Only a few topics became more relevant in the last years as Supply Chain Risk Management. But many companies are still focused only on their direct suppliers. There is no holistic supply chain risk management approach: Accomplishing transparency along the complete supply chain, monitoring risks of suppliers and sub-suppliers, realizing dangers in certain locations or considering critical logistic hubs or country risks…
Many companies still ignore these tasks, despite all the recent events like the tsunami in Asia, the Arabic spring, worldwide strikes and other geopolitical events.

Swiss Steel is a whole other story!

In order to protect their supply, Swiss Steel has already engaged with Supply Chain Risk Management for a considerable time. Swiss Steel particularly monitored financial figures and country ratings, and recognized after a while, that this information is not enough in regard to their approach. Because of the ongoing globalization, it became more and more difficult for the company to retain the overview over new and always changing risks. Information had often to be collected in a very time-consuming and arduous way. But the lacking basis of assessment was still a problem in terms of supply security.

Today, Swiss Steel has the approach to monitor a comprehensive amount of risks alongside the whole global supply chain. Since 2014 Swiss Steel is in use of the fully automatized riskmethods Supply Risk Network. Swiss Steel can now monitor and assess risk along the entire supply chain: 1-n tier supplier risk (compliance, financial stability, price fluctuation), location risk (natural hazards, strikes, fire) and country risk (political risk, foreign exchange risk). Additionally Swiss Steel can track logistical hubs. This supply chain visibility is of major importance for Swiss Steel. Today, the significance of maintaining the competitiveness of the supply chain is essential for the success of all persons affected and the global company itself.

scrm swiss steel

Supply Chain Risk Management at Swiss Steel


Swiss Steel future plans

But that is by far not all, Swiss Steel is already planning the next steps. In future, Swiss Steel wants to not only monitor all risks, but also the impact of those risk events and the damages they pose. Furthermore, the valuation of the impact provides Swiss Steel with comprehensive options to analyze the criticality and dependency on suppliers. The combination of risk information and criticality illustrates, in which area adequate measures have to be taken proactively in order to mitigate and prevent risks. Moreover, Swiss Steel is planning a holistic end-to-end risk management approach, which will also include the sales side into risk assessment. In this way Swiss Steel will not only be protected for supply chain disruptions, but also for outages at customers or the supplies on their way to the customer.

The precocious knowledge of risks as well as a proactive management in order to prevent damages enables Swiss Steel to react fast and appropriate in case of a risk event. Only thus can be assured that companies can protect themselves sustainably for damages by suppliers or supply chain disruptions. Certainly quite a challenge for purchaser and supply chain manager – but also the chance to achieve a key role within the company. Last but not least, the purchasing department contributes that way not only to protect the reputation of the company but also to secure the supply and profitability of Swiss Steel.

In sum: The comprehensive Supply Chain Risk Management approach of Swiss Steel not only helps the company to prevent and mitigate risks, but also to allow the company taking full control over their business and being ahead of their competitors.

Read the success story of our customer Swiss Steel.

Click here to read the complete article (German).


Heiko Schwarz is the Founder and Managing Director of riskmethods, responsible for Sales, Marketing and Business Development. Heiko has been working in the software business for 16 years, with 13 years in different areas of the strategic purchasing market. He has excellent knowledge in procurement, supply management and risk management and has been successfully helping supply chain and procurement organizations implement solutions to increase performance, reduce costs and minimize risks.

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