Supply Risk: Preparing for the Worst
Michael Lamoureux sat in on a supply chain conference last week and has been posting insightful tidbits over at Sourcing Innovation based on his learnings. Perhaps his most useful observations came out of his notes from a session led by Shell Oil Canada on Business Continuity Planning. As a strategist who has spent a good part of his consulting career working with clients on scenario-based analyses -- in supply chain and beyond -- I always find Shell's perspective on planning fascinating, as they pioneered the concept of scenario forecasting many decades ago. In other words, you can be sure that whatever they say regarding continuity planning is industry leading and based on decades of scenario-based experience.
Among other areas, Michael's notes from Shell suggest that companies consider the value of creating a business continuity plan as such an effort "only cost pennies on the dollar and will deliver a ROI many times what it cost to prepare in the event of a disruption". In addition he suggests that top customers of a company should demand such a level of preparedness given that they "should only work with you, or stay with you, if they know you can recover as fast as they can in the event of a major disruption." I agree, but here's a further thought: what about a supply risk or business continuity planning certification -- maybe industry based -- similar to ISO or TS from a quality perspective. Any takers?
- Jason Busch
Among other areas, Michael's notes from Shell suggest that companies consider the value of creating a business continuity plan as such an effort "only cost pennies on the dollar and will deliver a ROI many times what it cost to prepare in the event of a disruption". In addition he suggests that top customers of a company should demand such a level of preparedness given that they "should only work with you, or stay with you, if they know you can recover as fast as they can in the event of a major disruption." I agree, but here's a further thought: what about a supply risk or business continuity planning certification -- maybe industry based -- similar to ISO or TS from a quality perspective. Any takers?
- Jason Busch
I never thought about that ... take supply risk planning to the next level, and increase attention thereon, by offering certification. After all, it seems business these days only believe something is important if someone or something important certifies it!
Great idea ... what do you think Charles? Could a company like NextLevelPurchasing pioneer the concept by a creating a SPSRM (Supply Risk Management) certification specializing in risk management? After all, someone has start pulling the bandwagon before everyone else jumps on board. I'm sure you could round up a fair amount of development support, given that us bloggers, and a few thought-leading academic departments, seem to be harping on the subject quite a bit.
The material in the SPSM Certification Program does include a section on risk management. So employers hiring SPSM-certified professionals can already feel comfortable that they are hiring someone educated in risk management, as well as someone who is very well-rounded in other aspects of purchasing and supply management: technology, analysis, project management, contract law, best practices, sourcing, negotiation, etc.
So, I think that the question is: should there be a "sub-certification?"
I believe that, with such an idea, if someone built it, "they" will come (assuming that the organization has good marketing, product development, PR, affiliations, reputation, management, yada, yada, yada).
But would enough of "them" come to make it worth the investment?
I don't know if the business case could be strong enough to attract for-profit companies/investors. Proper market research would need to be done. Non-profits may bite, but non-profits are generally run in a fiscally responsible manner, too, so I'm not sure if it would be an easy decision for them, either.
Definitely a worthy idea to think about further, though...
Food for thought ...
This, too, could be part of a larger, more comprehensive supplier qualification method. I could see industry really getting behind this much more so than the scenario than I was commenting on.
Ah, the wonders of virtual brainstorming. "Blogstorming" perhaps?
Thanks. Fascinating stuff ... what is the link to your firm and is their anymore background available on the web on the assessment tool? Also, you might want to check out my older posts on supply risk. Just type in “supply risk” into the search form at the bottom right of the screen.
Cheers, Jason