Supply Chain Angst

Caroline McDonald


October 1, 2013

As global organizations become more complex, they are increasingly dependent on their supply chains—and more susceptible to the risks associated with them. Yet, of the more than 200 global companies that participated in a survey by PwC and the MIT Forum for Supply Chain Innovation, almost 60% said the risk management processes put in place to address potential supply chain disruptions were “immature”—meaning that they mitigate risk simply by increasing capacity or strategically positioning added inventory rather than by using longer-term, strategic measures. Companies’ top three concerns were increased dependencies between supply chain entities, more frequent changes in the extended supply chain network configuration and more frequent new product introductions. Those surveyed also believed the most important capabilities for creating a robust supply chain were aligning with supply chain partners, integrating internal business functions, and having an “upstream and downstream” information sharing process. In order to mitigate supply chain risk, respondents favored creating and applying a business continuity plan, implementing a dual-sourcing strategy, and using both regional and global strategies.