For supply chain
executives, the early years of the 21st century have been notable for major
supply chain disruptions that have highlighted vulnerabilities for individual
companies and for entire industries globally.
Today’s managers know that they need to protect their supply chains from serious and costly disruptions, but the most obvious - increasing inventory, adding capacity at different locations and having multiple - undermine efforts to improve supply chain cost efficiency. Surveys have shown that while managers appreciate the impact of supply chain disruptions, they have done very little to prevent such incidents or mitigate their impacts. This is because solutions to reduce risk mean little unless they are weighed against supply chain cost efficiency. After all, financial performance is what pays the bills.