Dive Brief:
- A recent survey on risk and resilience commissioned by FM Global found that of the 100 surveyed CFOs, well over half of respondents' companies had been harmed by operational risks like equipment failure (66%), data breaches (59%) or natural disasters (52%).
- In each of the cases, 34% of less of respondents claimed to be prepared for these risks. In addition, 54% said they had yet to recover loss recovery plans although 86% feel they need to be more resilient in the future.
- Perception of future risk is high as well, with 68% believing that revenues will be more vulnerable to operational risk and 58% believing that managing risk may impede meeting revenue targets. Perhaps as a result, only 41% plan to focus on operational risk prevention.
Dive Insight:
Another recent report found a full 40% of supply chain managers do not plan ahead for risk, despite the frequent instances of operational risks like equipment failure and data breaches disrupting supply chains.
At issue is financial investment in risk-preventing action. Managers may wonder why they should invest in risk management programs at all, especially when they're often pressured to reduce costs. Though it's difficult if not impossible to quantify the unknown factors that could affect the supply chain, managers could measure risk in terms of stability, or minimizing disruption that could bring down revenue. Protecting revenue-producing resources is the first step in decreasing loss.
Numerous options exist to help supply chain managers assess their level of risk. Acting now to plan for disruption could save time, money, and other resources in the future when chaos ensues.
