Mitigating supply chain risk through improved confidence

TLDR

The modern marketplace is marked by heightened turbulence, volatile demand, shortened product life‑cycles, and increased supply‑chain vulnerability to external shocks and strategic shifts. The paper argues that enhancing end‑to‑end visibility—improving supply‑chain information quality—will raise supply‑chain confidence and mitigate risk.

Abstract

Today's marketplace is characterised by turbulence and uncertainty. Market turbulence has tended to increase for a number of reasons. Demand in almost every industrial sector seems to be more volatile than was the case in the past. Product and technology life‐cycles have shortened significantly and competitive product introductions make life‐cycle demand difficult to predict. At the same time the vulnerability of supply chains to disturbance or disruption has increased. It is not only the effect of external events such as wars, strikes or terrorist attacks, but also the impact of changes in business strategy. Many companies have experienced a change in their supply chain risk profile as a result of changes in their business models, for example the adoption of “lean” practices, the move to outsourcing and a general tendency to reduce the size of the supplier base. This paper suggests that one key element in any strategy designed to mitigate supply chain risk is improved “end‐to‐end” visibility. It is argued that supply chain “confidence” will increase in proportion to the quality of supply chain information.