Stay in Business - Even if Your Vendors Don't

PRLog (Press Release) – Feb 23, 2008 – What would you do if your manufacturing partner went out of business? If you are like a growing number of companies, you may incur substantial delays in your ability to meet your customers' requirements. In an article published in the Spring 2008 edition of the John Liner Review, John Schaefer - the president of Global Risk Advisors (http://www.globalriskadvisors.com)- offers suggestions to reduce this risk.

According to Schaefer “Companies are realizing their vulnerability from the loss of key partners through a variety of efforts including supply chain risk management, enterprise risk management and business continuity planning." Lean manufacturing, global sourcing and even terrorist threats have altered the type of risks facing companies and the impact of a single loss, such as a fire, flood or earthquake. Holistic programs such as enterprise risk management offer companies a way to identify and manage these new threats.

In the John Liner Review article Schaefer provides several tips for companies trying to improve their risk management processes. Flowcharting is discussed as one tool. Other specific steps to take are:

•   Include references to BCP and supply chain risks in vendor scorecards
•   Contract review processes should establish requirements and allow audits.
•   Internal performance measurements, including performance reviews, should include BCP maintenance and risk assessment.
•   Strategic reviews should discuss supply chain risks and how they can be mitigated.
•   Product design should include factors related to supply chain risk management.
•   Allocation of losses and insurance costs should be related to the risks of the operation.

Companies that implement effective risk management practices can not only survive disasters better, they can more effectively allocate risk control spending and reduce the total cost of risk before the disaster. Consultants like Global Risk Advisors offer independent advice that helps organizations to manage risk so they can grow profitably even during difficult times.