Risk management is a fool’s errand without an end-to-end view and effective prioritisation

Abstract

Supply chain risk management (SCRM) begins at the foundation of any company’s capability. Whether it is in procuring rare earth minerals, securing timberland or caring for cows grazing in a field, leaders must manage risks that are not always covered by the company organisational chart. Just because these risks are outside of the corporate purview and often shared broadly does not mean firms are free from monitoring and mitigating them. There are groups, associations and councils of supply chain stakeholders that come together to help monitor and protect these types of foundational supply chain inputs. By remaining active in them and supporting them, supply chain managers continually monitor the risk and help guide mitigation strategies. Organisations employing SCRM correctly understand and monitor these risks. They employ structured SCRM frameworks that extend from mission and policy through operations to human performance development. At every level, resources are empowered to monitor and engage with their supply chain stakeholders to manage risk. At the operational level, they employ a model to identify and prioritise risks. Many use the CARVER model, made up of these steps: criticality, accessibility, recuperability, vulnerability, effect and recognisability. This paper explains how a prioritisation model applies to a foundational supply chain risk, like that of the raw materials/cattle of the beef industry. Recent and widely available data, as well as general familiarity with beef in the US, make the industry a useful example to demonstrate supply chain prioritisation and planning.