How Can You Drive Opportunity If You Cannot Manage Risk?

Supply Chain Risk
Management Study
Summary Charts
March – May 2018

Supply Chain Insights LLC Copyright © 2018, p. 2
Agenda
 Study Overview
 Summary
 Supply Chain Overview
 Risk Overview
 Risk Drivers and Disruptions
 Risk Management Performance

Respondents Are Grouped into Users, Vendors, and Others

Over Half of Users Work in a Process Industry; User Companies
Have an Average of $4.2B in Revenue and 11K Employees

The Most Common Industries Among Users Are Chemical
and High-Tech and Electronics

Nearly One-Third of Users Are Directors or Higher and
the Majority Work in a Supply Chain Role

Respondents Primarily Work in US/Canada,
Western Europe or Asia

Agenda
 Study Overview
 Summary
 Risk Overview

Only 18% of Users Consider Risk Management a Top Five
Business Pain for Doing Their Job

While Users Consider Their Supply Chain to Be Controlled,
It Is Also Has Room for Improvement, Cautious, and Traditional

In Five Years, Users Expect Their Supply Chain to Be Aligned,
Agile, Proactive, and Controlled

In Five Years, Users Expect the Most Growth in Terms of
Supply Chain Alignment, Proactivity, and Agility

Users Rate Their Supply Chain Higher Than Do Vendors, Especially
on Being Controlled, Working Well, Aligned, Agile, and Fast

Vendors Are More Likely Than Users to Describe Their Supply
Chains in Negative Terms, Especially Reactive, Fixed, and
Functional Silos

Both Users and Vendors Believe Users’ Supply Chains Will
Be Aligned and Not Very Risk-Taking in Five Years

Nearly Half of Vendors Think the Supply Chain Leader Should
Report to the COO, vs. a Reported 15% Who Actually Do
(According to Users)

Agenda
 Study Overview
 Summary
 Risk Overview

Vendors Claim to Be More Familiar with Supply Chain Risk
Management Than Users Claim

While Users Report Risk Management Is Embedded in Other
Processes, Vendors Are More Likely to Believe That Users Are Just
Getting Started

Users and Vendors Agree That Risk Management
Is Important to Supply Chain Strategy

Overall, Respondents Report That Risk Management Is Important
Due to a Major Disruption for the Company or a Supplier

For Users, Risk Management Is Primarily Important Due to
Being the Right Thing to Do and Leadership Focus

Users Are More Likely Than Vendors to Report Risk Management Is
Important Due to Leadership and Being the Right Thing to Do

Supply Side Risks Are Reported to Be the Primary Issue
Addressed by Risk Management

Users Are More Likely Than Vendors to Report That Risk
Management Addresses External Risk

While 41% of Users Say Supply Chain Risk Management
Responsibility Falls to the Head of the Supply Chain, Vendors Are
Less Likely to Agree on Where Responsibility Should Fall

Agenda
 Study Overview
 Summary
 Risk Overview

Overall, Respondents Believe the Top Three Supply Chain
Risk Drivers Are Visibility, Complexity, and Demand Volatility

Users Are More Likely Than Vendors to Believe Regulatory
Compliance and Demand Volatility Are Top Risk Drivers

Overall, Respondents Believe Increasing End Consumer Power
and Increasing Complexity Will Be Top Risk Drivers in Five Years

Users Are More Likely Than Vendors to Expect Risk with
Regulatory Compliance and Product Quality Issues

Overall, Lack of Visibility Is Top Risk in Past and Future,
but Not in the Future

For Users, Increased Complexity of Operations Is Top Risk in
Past, Present, and Future

Overall, Respondents Report Lack of Visibility, Computer Security,
and Increased Complexity to Have Increased as Risk Drivers vs.
Five Years Ago

Overall, Respondents Expect Increased End-Consumer Power,
Geopolitics, Economic Uncertainty, Energy Scarcity, and Water
Scarcity to Increase as Risk Drivers in Five Years

Overall, Respondents Expect the Greatest Increase in Risk
from Increased End-Consumer Power

On Average, Users Report Experiencing 3.5 Supply Chain
Disruptions Last Year

According to Users, 41% of Their Supply Chain Disruptions
Last Year Were Included in Financial Reporting

Respondents Report That the Top Three Events to Impact
Supply Chains in the Past Five Years Include Cyber Attacks,
the West Coast Port Slow Down, and Hurricane Harvey

Vendors Are More Likely Than Users to Think Cyber Attacks
and the West Coast Port Slow Down Are Top Events

Agenda
 Study Overview
 Summary
 Risk Overview

Users Rate Their Supply Chain Risk Management Higher
Than That of Other Companies

Risk Management Performance Is 32 Percentage Points
Lower Than Importance Among Users

Users Rate Themselves Higher on Performing Better on
Managing Risk Than Vendors Rate Users

Users Report They Are Most Prepared to Handle Product
Quality Issues

Vendors Think Users SHOULD Be Most Prepared to Handle
Lack of Visibility, Product Quality, and Increased Complexity

While 41% of Users Report Lack of Visibility Is Top Three Risk,
Only 21% Report It Is Among Top Three That
They Are Prepared to Handle

Two-Thirds of Users Report They Have Visibility of First Tier
Suppliers During a Supply Chain Disruption

62% of Users Report Monitoring Financial Status of First Tier
Suppliers but Only 40% for Extended Tier Suppliers

Overall, the Three Most Important Supply Chain Risk Management
Techniques Are Business Continuity, What-if Analysis, and
Conversations with Suppliers and Customers

Users Are More Likely Than Vendors to Believe Inventory
Buffers and Manager Insights / Intuition Are Top Techniques

How Can You Drive Opportunity If You Cannot Manage Risk?

How Can You Drive Opportunity If You Cannot Manage Risk?

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