Global Logistics & Supply Chain Strategies

The following is an excerpt of a conversation with Beth Enslow, a senior vice president in Marsh’s Supply Chain Risk Management Practice:

Q: Were there other ah-ha's for you in the survey results?

Enslow: The other big ah-ha was around the different ways that people define a "critical" supplier. If you ask your procurement director whether the company has contingency plans in place with its top 10 critical suppliers, he may very well say, "yes, we do." But, in his mind, the top 10 suppliers are those that the company buys the most from. In reality, though, what could bring the company down is a low-cost screw or something that is sourced from only one supplier. I recently saw a case like this where the part was a paper filter, which was very inexpensive but it was sourced from one supplier that had only one factory, so this was a critical vulnerability. When you look at risk, you need to put on a different lens in order to find the hidden vulnerabilities in the supply chain.