Supply Chain Risk Review

With the coronavirus front of minds for businesses across the globe, understanding the risks that may interrupt the performance of your organisation's supply chain is more important than ever. It can allow you to build risk mitigation strategies that increase resilience and enhance performance.

Challenges

The effective operation of the supply chain is the lifeblood of many organisations. Ensuring that the supply chain delivers goods, services and information to customers cost-effectively is vital. In recent years, however, many supply chains have undertaken significant change through a mix of technology change, new sourcing arrangements (often offshore), outsourcing and regulatory change. The transformation from a domestic, largely manual, supply chain to an international and highly automated supply chain, can expose an organisation to risks not previously encountered. Without understanding potential risks an organisation may be exposed to risks that have not been adequately considered and mitigated. Whether management has concerns, something has happened or for good governance, it is important to undertake a regular risk review of the supply chain.

Opportunities

Business interruption whether caused by internal failures (manufacturing processes, IT systems, process failure) or external failures (coronavirus, supplier interruption, natural disasters, social disruption) can have a significant financial impact if not mitigated quickly. By understanding the broad range of strategic and operational risks being faced by an organisation's supply chain, risk mitigation, and management strategies can be developed. These strategies can reduce the likelihood of interruption, reduce the severity and improve the recovery time thus protecting the organisation, its customers and suppliers. In addition, a review can identify opportunities to improve performance, align processes, improve reporting, reduce costs and improve service.

Approach

To undertake a Supply Chain Risk Review we undertake a five-step process:

  1. Develop an understanding of the supply chain using our proprietary Supply Chain Strategic Review methodology
  2. Accelerated insight workshop considering the strategic and operational risks (internal and external) that could impact the business
  3. Consider the opportunities to mitigate/reduce risk and improve performance using our ‘insight-led’ knowledge of better practices in supply chain
  4. Accelerated design workshop to develop risk and performance improvement and ensure buy into change by key people in the organisation
  5. Reporting and follow-up

This is a highly pragmatic, ‘insight-led’ approach to assessing risk (and opportunities) in the supply chain. Utilising our knowledge of leading supply chain processes, systems and performance metrics we are able to efficiently identify key supply chain risks and mitigation strategies.

Outcomes

The following are outcomes of this approach:

  • Identification of key supply chain risks including causes and consequences
  • Prioritisation of supply chain risks
  • Identification of risk mitigation strategies including commitment to change from key people in the business
  • An agreed action plan including what is to be completed, by whom, over what time frame
  • A performance monitoring framework to ensure the ongoing identification and control of risks
Benefits

The benefits of having a risk review undertaken by supply chain experts are that we can help to reduce costs, increase customer service and ensure that your supply chain is resilient and supports your organisations objectives.

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Testimonials

We engaged GRA on an end-to-end review of our supply chain capability. Their MRO Supply Chain framework and assessment helped us understand what our priorities for improvement are, while their maturity plan provides us with the practical steps to make that happen. Through their professionalism and insight, our team has the confidence to take the next step on our continuous improvement journey.

– Jake Adams, Deputy Program Manager, Northrop Grumman Australia – Technology Services

Typical results

  • 20-40% inventory investment reduction
  • increased service levels ranging up to 99.9%
  • 10%-15% reduction in supply chain operating costs
  • 5%-20% spend management savings
  • the ability to fund business initiatives from operating cash flow (OCF) improvements
  • improved return on capital employed (ROCE)
  • a minimum 3:1 ROI (10:1 to 30:1 typical)