The author argues that risk management should be considered a new supply chain "game changer" rather than sustainability. Conducting supply chain risk management can provide competitive advantages by allowing companies to more quickly and effectively respond to risks. Research shows that companies with mature risk management processes suffer less revenue decline when risks materialize. For example, after deeply analyzing risks throughout its supply chain, AGCO was able to avoid issues and save millions. Risk management maintains supply chain resilience while collaborating with suppliers.

1. Supply Chain Game Changer
Jason Lutowsky
In J.Paul Dittmann’sbook, Supply Chain Transformation,he discusseshisideaof the 7 supply
chaingame changersthat resultinsignificantstrategicimpactforcompanies. Althougheachgame
changershouldhighlybe considered,Ibelieve thatthe implementationof RiskManagementina
companyholdsenoughpotentialvalue toasupplychainto be a new game changer. Throughinternal
and external evaluationsof risk,companiesmaydevelopstrongersupplychainstrategiesthatwill lead
to maintainingcompetitive advantages intheirindustry.
Whenbudgetsare tightand resourcesare focusedonthe short-term, itbecomes difficultfor
companiesto openupfor relocatingtheir time &resources. However,allocatingpreciousresources
nowto analyze potential risksof daytoday business throughoutall tiersof theirsuppliers reducesthe
probable negativeimpactthatitwouldhave onyour supplychain.Focusingonthe internal risks,astudy
by the BusinessContinuityInstitute’sSupplyChainResilience Reportfrom2015 states,“74% of
companiesexperience atleastone supplydisruptioneveryyear”. The same reportcorrelatesthat72%
of these companieslackedacomplete overview of theirsuppliersforriskmanagementandresultedin
productiondowntime andlossof sales. Beingproactiveagainstinternal riskswill allow businessesto
continue flowingmore efficiently andeffectivelywhile minimizingthe potential lossof sales.
While internal risksare knowntodisruptthe flow of businessandcause a ripplingeffectdown
the supplychain,the external risksare muchharderto for see and may leadtodetrimental issueswithin
theirsupplychain. External riskswillhappenregardlesswhichiswhyitisimportanttohave a basicplan
of actionof how yourcompanywill react. An importantandcurrentriskthat is aboutto upsetmany
companiesglobal supplychainthatsell productsinthe UnitedStatesisfromthe changingpolitical
agenda. PresidentTrumphasalready withdrawn fromthe Trans-PacificPartnershipforrenegotiations,
but as well hasplansto add a 35% tariff onimportedgoodstothe US. These political factorsnowhave
companiesina struggle toreevaluate theirsupplychains. Asquestionsarise toaccommodate these
changesfromrelocatingorfindingnewsuppliers,towhethertopassthe increasedcostsdownto the
customerswill take some seriousresourcestofindanew optimal solution.Environmental risks should
playa strategicrole inevaluatingsourcingandmanufacturingoptions.Understandinghow prone certain
areas of the worldare to natural disastersshouldinfluence astrategyof whatactionsshouldtake place
whentheydooccur. Lastly the technologysectorof riskmanagementfacesthe issue of consistent
improvements. Companiesface the trade-off betweenhavingcompetitive advantage withthe newest,
oftenexpensive,technologyverse howobsoletewithlow salvagevalue afteracouple years.As
technological risksaffectspecificindustriesmore thanothers,itshouldnone the lessbe carefully
weighed. These external risksare hardto predictandplanfor,but the importance of analyzingthe
possibilitiesandconductingastructure fora plan of action will allow yourcompanytolessenthe
severityof theirpotential impacts.

2. The importance of riskmanagementisdisplayedcontinuouslythroughthe analysisof the
internal andexternal risksandabove all cangive yourcompanygreatercompetitiveadvantage.
Conductingsupplychainriskmanagement providesmuchgreaterleverage overyourcompany’s
competitionthatdoesnotyethave itin place. Once evaluatedandimplemented,yourcompanywillbe
able to handle these riskswithquickerresponse timesand more effectivelythanyourcompetition.
These othercompaniesthatdidnotuse resourcesaheadof time to planforriskswill be requiredto
allocate more resourcesonshorternoticestohandle andfix the issues. ResearchconductedbyMIT and
PwCabout the maturityof riskmanagementprocessesstatesthat“44 percentof companieswith
mature processessuffereda3 percentor more decline intheirrevenue,comparedto57 percentwith
immature processes”(Erana,2014). Althoughthe lossesinrevenue are inevitable,the severitycanbe
greatlyreducedwithamature riskmanagementprocess. The mature processwill leadtoamore
proactive response tothese riskswill contribute tomaintaining apositive reputationforyourcompany.
A case studywas conductedonAGCO abouttheirimplementationof SCRMand the resultswere
spectacular. Afterdeeplyanalyzingrisksthroughoutall tiersof theirsuppliers,the companywasable to
avoidand save millions onissuesthatwere arisingquickly (Banker,2015).Whenrisk managementis not
successfullyimplemented,the competition’sissuesmaycause disturbances,price increasesandrevenue
shortfalls all the waydowntothe consumerswhichmay hurt the brands image. Riskmanagementisa
game changer thatdoesnot onlyhelpavoidbiggerissues,butprovidesnecessarycompetitive
advantagesaswell.
While Dittmann’s7supplychaingame changersare all majorfactors to a strongstrategicimpact
on companiessupplychains’,Ibelieve thatRiskManagementshouldreplace hisSustainabilitygame
changer. Beinga sustainable company hasgrownintothe infrastructure of today’sbusinesses,plans,
and correlateswithbasicsupplychainstrategies. However,itdoesn’tdifferentiate companiesaseach
continuouslyalreadylooksforwaystobe sustainable. Indepthriskmanagementonthe otherhandhas
grownintoa greaterneedforcompaniesthatshouldbe addressedduringthe developmentof a
company’ssupplychainstrategy.Thisnew game changermaintainsthe resilience neededforan
efficientsupplychainwhile workinghandinhandwithcollaborationof the suppliers.

3. Works Cited
Banker,S. (2015, December2). NewSolutionsforSupply Chain RiskManagement:A CaseStudy.
RetrievedFeburary6,2017, fromForbes:
http://www.forbes.com/sites/stevebanker/2015/12/02/new-solutions-for-supply-chain-risk-
management-a-case-study/2/#519322b51277
Erana, L. H. (2014, September18). The Tech Sector's Top 10 Supply Chain Challenges.RetrievedFeburary
6, 2017, from Material Handling&Logistics:http://mhlnews.com/technology-automation/tech-
sector-s-top-10-supply-chain-challenges
BusinessContinuityInstitute,SUPPLYCHAIN RESILIENCEREPORT,2015. RetrievedFeburary6,2017,
fromRiskMethods: https://www.riskmethods.net/en/supply-chain-risk-management