Supply Chain Risk management constitutes strategies used to manage risks that occur in the supply chain. SCRM is a process that entails continuous assessments with the main objective of ensuring business continuity. Supply Chain Risk Management enables a business to maintain a competitive advantage and also deal with the many uncertainties in a business. This essay will explore SCRM development from the year 2009 to 2013. These years were marked by massive development and implementation of SCRM practices. The three main themes to be explored in this essay are Management, Assessment, and Sustainability. Over the years, SCRM has shown the need for information on how to manage supply chain risk, methods to accurately assess risk, and also the Sustainability of businesses when faced with certain risks.
In 2009, ‘Managing risk for High performance in extraordinary times’ was among the first global reports that addressed supply chain risk management. In this report, 85% of the executives interviewed stated that there was need for a new risk management plan. Half of the 85 % said that their companies were spending a lot of money on risk management while others stated that their companies were missing out on investment due to a lack of risk management processes. In the subsequent years, it was evident that the theme of risk management became very important. For example, in 2012, the Great East Japan Earth Quake had a major impact on businesses. BCI recorded that it took very long for supply chains to build back again after the earthquake (Schlegel & Trent, 2014) . The research was conducted on risk management and three gaps were identified to have not been answered. They included a definition gap, process gap and methodology gap. All these are details required to help a business figure out the best risk management strategies.
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The theme of risk planning and assessment has been recurrent over the years. Businesses must find ways to plan for risks and also assess the possibility of particular risks. In 2010, an MIT report showed that most businesses preferred risk prevention rather than risk planning. It was as a result of businesses choosing risk prevention that the PRTM chose to state that opportunity management and risk will always be part of a supply chain. The concept of risk planning has over time been depicted by the presence of insurance companies. In 2012, Forbes Insights and Deloitte carried out a study and found out that risk planning was embraced by 40% of their interviewees. Most respondents aimed to educate more staff and themselves more on how to plan for risks.
Business sustainability is a major theme as it contributes to the making of decisions about a business. The world Economic Forum report of 2013 entailed Building Resilience in Supply Chain. This research encouraged businesses to embrace risk management. Business sustainability is achieved by businesses maintaining their competitive advantage. Certain supply chain risks would result in tarnishing these businesses and they would lose popularity. However, the concept of building resilience was a way to show that businesses were always going to face supply chain risks. Therefore, to sustain their organizations, they were obliged to adjust and deal with supply chain risks.
In conclusion, Supply Chain Risk management has developed over the years. Businesses have in the past chosen to avoid risks but over time the risks of the supply chain have become inevitable. Thus, it is evident that risk planning, risk management, and sustainability of businesses are areas that require great focus for the success of businesses.
Reference
Schlegel, G. L., & Trent, R. J. (2014). Supply chain risk management. https://doi.org/10.1201/b17531
