Analyst Insight: Lehigh University developed the first MBA in supply-chain risk management (SCRM) in 2010. The concept has since grown to a global level. The SCRM Consortium now includes 26 companies and about 1,200 SCRM professionals around the globe. Along with similar efforts by other organizations, it continues to assist companies in identifying, assessing, mitigating and managing supply-chain risk.
SCRM education and professional development is becoming the topic of an increasing number of books, articles and magazines. Entities such as the Business Continuity Institute (BCI), as well as pure insurance and risk organizations, are beginning to explore the subject. The Association for Supply Chain Management (formerly APICS) continues to support the concept with its certificate in SCRM. The Logistics Institute of Canada offers a certification in supply-chain resiliency that is case-, team- and tool-based. The SCRM Consortium has just launched a new online course in supply-chain risk and resilience, and is developing another for public healthcare supply chains, culminating in a certificate from Lehigh. In addition, new software solutions are coming online every six months. The landscape also includes new metrics, such as time to recovery, value at risk, risk priority numbering, resiliency indexes, self-assessment maturity models, and online country risk.
Some key actions need to be taken within the next couple of years. First and foremost is development of a taxonomy — an agreement on terms and definitions. This is critical to gaining worldwide traction. In addition, organizations are beginning to develop simulation models and games to demonstrate how supply chains react to risk disruptions, and to provide an understanding of how new techniques and tactics can mitigate financial impacts. Academicians know that games accelerate learning. New software solutions will also be needed to identify global risks expeditiously, and new metrics and methodologies will be required to assess those risks. More educational forums will be needed, highlighting case studies of exemplar companies that demonstrate the effort’s return on investment. Finally, there needs to be a voice of record — an organization that can marshal resources, build and maintain a body of knowledge, and disseminate it around the globe.
Global supply-chain risks won’t be going away anytime soon. More universities will be teaching SCRM and resiliency as a critical success factor for global supply-chain excellence. There will be more software solutions that provide autonomic global risk alerts, digitize those alerts, and disseminate the data to subscribers. Such alerts are crucial to the ability of supply chains to identify, assess, mitigate and manage risks faster than their competitors. Expect also to see more credential programs for supply-chain risk and resiliency. One big issue that will likely require more work is the need to demonstrate return on investment by companies undertaking risk-management initiatives.
A consolidation of SCRM software vendors could begin, providing a more comprehensive SCRM and resiliency footprint for companies across multiple industries. There will be a need for company cultures and their appetite for risk to be better understood and enhanced through education. Companies will derive competitive advantage by codifying the risk-management workflow and expanding synergies between finance and supply chain by way of the “three Es”: education, elevation and evolution.