Managing risk 'crucial' - Gartner Supply Chain Symposium
Gartner industry experts are discussing the playbook for chief supply chain officers (CSCOs) faced with ongoing global disruption, at the two-day Gartner Supply Chain Symposium in London, which began yesterday (September 27) in London.
Gartner is urging CSCOs to take positive action to navigate supply chain problems caused by a welter of factors, including the war in Ukraine, China’s economic problems that zero tolerance approach to Covid and legacy disruption arising from the pandemic.
It adds that these factors are overlain on the problems supply chains have always faced, such as natural disasters, trade wars and cybersecurity breaches – and that the problems do not end there.
“There are many types of macro supply chain disruptions,” said Chris Poole, Practice VP with Gartner Supply Chain. “In addition to managing these, CSCOs must also pay close attention to micro disruptions, such as new entrants to the market, emerging technologies and internal organisational changes.”
CSCOs must understand appetite for risk' - Gartner
Poole and other experts agree that organisations looking to mitigate against disruption must understand “internal appetite for risk and areas of exposure”.
Poole says: “Risk appetite refers to the amount of risk a company is intentionally taking to achieve their strategic objectives.
“Risk appetite defines the nature of acceptable risks, and provides performance boundaries for strategic objectives. Risk management has never been more important.”
A 2022 Gartner survey of 273 board members found that 57% are increasing their risk appetite in the face of ongoing disruption.
“It’s crucial for CSCOs to understand where their company is deliberately increasing risk, so they can manage those additional risks in line with other disruptions. Poole said.
As well as risk management, the symposium urged CSCOs to accelerate digital transformation efforts.
Poole said that digital transformation helps mitigate disruption by improving supply chain agility.
“Agility helps supply chains respond quickly to unanticipated changes in demand and supply,” said Poole, who added: “It also gives CSCOs the ability to adapt to structural changes by modifying strategies, products and technologies.
“CSCOs should evaluate which frameworks, capabilities and technologies are best suited to progress their supply chain maturity so that risks can be prioritised, planned for, and controlled more effectively.”
Fostering strong partner ecosystems should also be central to CSCOs’ approach to navigating supply chain difficulties, Gartner analysts agreed.
“It’s critical to build a digital ecosystem that connects an organisation’s supply chain with their partners, customers, manufacturing sites, vehicles and other machines, and other nodes to extend visibility to sense disruption,” Poole said.
He added: “The greater the ecosystem, the greater the reach to sense changes and increase options for a path forward.
