Applying Examples of Sustainable Business Risk Management

image: risk management Traditional procurement strategies have primarily focused on cost, with most professional consulting firms targeting savings of 7% to 9% of revenue (including: vendor reduction, leverage spend, inventory reductions, transaction efficiencies, and administration savings through centralized functions).  However, growing business sustainability risks and opportunities within the supply chain have many companies reevaluating their purely cost savings driven decision making.  Our sustainability consulting continues to follow the progress of industries heavily dependent on a healthy and sustainable supply chain.

In a recent Industry Week interview with a major supplier in the auto industry, IW reveals there is still residual turbulence following the economic downturn.  These affects continue to affect the business sustainability at Dana Holding Corp. and with its Tier 1 suppliers.

"Our success as a company is dependent upon having a strong and viable supply base…The more we can plan, the better cost control we can have, and the better we can mitigate impact to our plants, and most importantly, mitigate impact to our customers…We have a lot of work ahead of us, but we certainly have a roadmap on how we're going to get there." - Gary Baugh, senior director of purchasing for Dana's Power Technologies Group

Our professional consulting has observed many leading companies are now realizing the unique value in elevating sustainable supply chain management as a strategic in-house competency.  We find companies are examining the value of company resources.  Among the other fronts on which Dana is working to manage supplier risk, the company is:

  • Developing a master database that will detail "risk attributes" for each supplier.
  • Developing analytics and reporting capabilities to determine supplier risk beyond financial factors.
  • Working with its OEM customers and suppliers to establish dual validation of critical raw materials and components.

Growing business eco awareness and resulting business sustainability risk has provided companies with a new perspective to reassess their core functions.  At Taiga Company, our sustainability consulting provides information and business resources to clients of all sizes seeking to make incremental steps  towards a sustainable supply chain.  We find insight from both the challenges facing each industry individually and the solutions that can be leveraged universally.

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