Saturday 18th Nov 2017 - Logistics Manager

Time to outsource risk?

Who should manage supply chain risk? The assumption is that it is something that is so fundamental to a company’s business that it really has to be an internal responsibility – and at a high level.

Malory Davies FCILT, Editor.

Malory Davies FCILT, Editor.

But could a company realistically outsource its supply chain risk – or at least the management of it?

The thought is prompted by the fact that DHL is now offering two products designed to help companies manage risk. They are branded DHL Resilience360 – one provides risk assessment and the other provides incident monitoring.

DHL has also launched a Supply Chain Risk Exposure Index designed to assess weak links in the supply chain.

Bill Meahl, DHL’s chief commercial officer, said: “Any company relying on complex supply chains needs to improve its risk management and our report provides insights and methodologies to help companies develop smarter strategies. The goal is to build resilient supply chains – ones that will also give companies a competitive edge.”

For organisations, simply recognising the risks that face them is an issue – and they are not always obvious. Flooding is not uncommon, and if you are in an earthquake zone, it would be foolish to ignore the threat.

But how many people in the motor industry knew that a fire at a plastics factory in Germany in 2012 would threaten car production globally? And who would have thought that only a couple of year ago major supermarkets in the UK would find themselves selling horsemeat as beef?

Ultimately, of course, risk is a business issue and cannot simply be delegated to someone else. There is already software available to help companies manage supply chain risk – and some insurance companies also have services.

But with DHL’s initiative we could be seeing the first steps by third party logistics providers into the market – with the development of a whole new range of supply chain risk products on the horizon.