In a world of increasing pressures and threats, there are all kinds of reasons why supply chain risk management is becoming more and more important.
However, it's critical to realize that SCRM is about more than just avoiding a problem—it’s about driving direct and measurable value for procurement and supply chain organizations. Business continuity, supply chain visibility, CSR and compliance, supplier relationship management: These are all ways in which SCRM is a game-changer.
Supply chain risk management should be at the forefront of everyone’s mind—not just those in procurement or supply chain roles. Need help showing key stakeholders exactly how much SCRM is going to help everyone? Here are the five key steps to building your SCRM business case.
1. Explain the supply chain risk facing your organization.
The goal of this step is to make sure that stakeholders understand exactly what supply chain risk is. This involves asking some key questions to highlight where risk lies, and can also involve bringing in past examples of risk incidents.
2. Explain the implications and the cost of the supply chain risk facing your organization.
The goal of this step is to make sure that stakeholders understand the need for supply chain risk management. This is when you create the burning platform that justifies the investment.
3. Explain what supply chain risk management should look like.
The goal of this step is to describe the promised land of supply chain risk understanding: up-to-date market knowledge, rapid information and alerts and planned mitigation/preventive actions—all of which will be in place after the investment.
4. Explain the plan: how to achieve the supply chain risk management vision.
The goal of this step is to describe the proposed solution (presumably a technology solution) and what is required to establish it (in other words, a high-level adoption plan).
5. Explain the costs and benefits.
The goal of this step is to explain the investment and the return on investment, with financial and non-financial costs and benefits explained, including the plan for tracking those benefits. Want to know more about building the business case for supply chain risk management?
