How do you manage supply chain risk? A new study by the Economist Intelligence Unit reveals several different strategies, but even so, many for many organisations it comes down to heavy monitoring of relationships and the judgement of managers.
And that is going to challenge many organisations as we enter the era of “big data”. This is generally defined as a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications.
Supply chain disruption is becoming more frequent and severe, according to the EIU report “Strategies for managing customer and supplier risks”. The study, sponsored by Dun and Bradstreet, revealed that companies are finding risk management more challenging as they tie into more complex supply chains that expose them to third party risks.
Large organisations are already adopting a structured approach to enterprise risk management. And the development of advanced analytics is opening the way to more effective management of “big data”.
The EIU’s Alasdair Ross points out that: “Data analytics, like most emerging digital tools, are moving quickly from being an expensive option for the few to an off-the-shelf solution for anyone who wants to have a go.”
The promise is obvious. But better data analysis tools are of no value unless they can analyse high quality data. And good information doesn’t guarantee good judgement. You need good managers for that.