Stakeholder Engagement Reducing Risk in the Supply Chain

image: engagementThe Supply Chain Standard post, Who’s Responsible for Supply Chain Risk, tours the evolving landscape of sustainable supply chain management from threat monitoring perspective.  In addition to the many risks that that often plague an organization, growing concerns in the supply chain may actually be keeping more executives awake at night.

“Non compliance to Health and Safety requirements, poor Corporate Social Responsibility policies, a lack of attention to quality and, in the present harsh economic conditions, a supplier’s potential to fail financially, may all impact a buying organisation’s revenue and, perhaps, most critically, may cause huge damage to corporate or brand reputation.” 

Focused on how organizations can take a more proactive approach, our sustainability consulting is reminded of the CFO Magazine’s structured three-prong framework to sustainable supply chain risk mitigation.  Key components of this comprehensive advice include:

  • Look Beyond the Obvious – Some organizations focus on mitigating risks that are palpable and overlook less-obvious ones.
  • Expect the Unexpected – Organizational risk-management plans may deal with known or suspected risks but fail to provide a comprehensive overview of the risks inherent within the supply chain. 
  • Practice to Be Perfect – Some risk-management plans are contained neatly in binders and placed on shelves. That doesn’t mean those responsible for implementing these strategies are aware of the origin, likelihood, and severity of risk that exists. Effectively planning for risk requires full disclosure of risks, and all risk-mitigating and contingent actions that may be required, to all who will have to perform such actions. 

Through our own sustainability consulting, we find common characteristics among sustainable organizations to have the ability to effectively manage the flow of information across key business stakeholder relationships.  While many organizations target immediate value, some of the more well known leading organizations continuously assess the health of their supply base. 

“Engage key stakeholders when developing supplier-specific distress signals and heighten the urgency of supplier risk management by changing business partner thinking about where supply protection fits into larger list priorities.” –Procurement Strategy Council

Stakeholder engagement within the supply chain provides an opportunity to immediately define and determine risk.  In fact, the true ‘business sustainability’ differentiators are those who understand and effectively mitigate the potential derailleurs of supply. Visit us at Taiga Company to learn how social media engagement strategies can help reduce risk in your supply chain.

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