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Addressing Supply Chain Risk, Sustainability in Strategic Plans

Supply Chain RiskAlthough two of the biggest concerns in supply-chain management are risk and sustainability, they are often viewed separately when they should be addressed concurrently in strategic and operational plans, according to a report by The Conference Board.

The report goes on to warn that keeping the two areas separate may ultimately put firms at considerable risk.

As organizations increase the scope of their work to include international operations, supply chain management has become increasingly critical, and while a great deal of attention is paid to external supply chain risks, the risks that may emerge from internal policies and actions are often ignored.

The report notes that there are two broad categories of internal supply chain risk: actions taken within the firm and the firm’s policy decisions. It also lists a number of internal supply chain risk categories, including policies, resources, operational and time compression.

In contrast, external supply chain risk categories include governmental actions, infrastructure deficiencies, supplier difficulties, logistical problems, price, terrorism, natural disasters and accidents.

Sustainability, however, is typically defined with three categories: environment, social responsibility and organizational sustainability, with actions in one area invariably having consequences in the other. For these reasons, addressing supply chain risk and sustainability together makes sense.

According to Nada Sanders of the EcoNautics Sustainability Institute at Lehigh University, with more and more conscientious consumers and growing limits to resource availability, successful companies in the future will be those that have both sustainable supply chains and operations.

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