Womble Carlyle Supply Chain Management Blog

Following legal issues related to supply chain management.

Tuesday, November 18, 2008

New article spotlights role of risk management in supply chain matters

Most people would agree that risk management is a vital component to successful supply chain management. However, a recent survey of supply chain manager found that none rated their current risk management system as "highly effective." Only 35 percent rated their risk program as "moderately effective," meaning that more than two-thirds of surveyed companies find themselves without a sufficient plan to meet unexpected contingencies.

The current issue of Shipping Digest has an excellent article on the role of risk management in protecting supply chains.

The article spotlights the excellent response Cisco Systems had to a massive earthquake in China earlier this year. Cisco has made risk management a point of emphasis and that diligence paid off during the earthquake.

Risk mitigation often makes company leaders cringe. After all, it is an "all expense/no return" investment. Unless, of course, you happen to need it - at which point it becomes invaluable.

In addition to working directly with your vendors and customers to coordinate disaster recovery planning, supply agreements need to reflect this planning and implement risk mitigation techniques on a consistent basis. Too often, a company has hundreds of different agreement so that when a disaster hits, management must spend far too much time just figuring out what each vendor or customer agreement requires, rather than focusing on risk mitigation.

After reading this article, prudent supply chain managers will undoubtedly be inspired to collaborate with their internal and external risk management professionals to examine potential legal, accounting and insurance risks. A risk assessment audit with experienced supply chain professionals can help you identify and correct areas of weakness before they become a problem.

Monday, November 3, 2008

Challenges facing the trucking industry.

A recent report published by the American Transportation Research Institute (ATRI) says that the trucking industry puts the state of the economy near the top of the challenges it faces. Not surprising. It is second only to fuel costs, which takes the top spot in the top ten challenges the trucking industry says it is facing.

Here's the top ten list:

1. Fuel costs
2. Economy
3. Driver Shortage/Retention
4. Government Regulation
5. Hours-of-Service
6. Congestion
7. Tolls/Highway Funding
8. Environmental Issues
9. Tort Reform
10. Onboard Truck Technology

The information from which the report was compiled had to have been gathered before the economy took its nose dive in September and October. By now, it wouldn’t be surprising if "the economy" dwarfed all the other challenges listed in the top ten.

To read observations from the report on each of the above topics, click here.

-- Karen Carey