Skip to content
Resilic Logo
  • Solutions
        • Solutions

          • EventWatchAI
          • RiskShield
          • Multi-Tier Mapping
          • CommodityWatchAI
          • Supplier Assessment Library
        • Data Marketplace

          • Autonomous AI Mapping
          • Resilinc Disruption Vulnerability Index
          • R Score
          • Supplier Screening
          • Application Programming Interface (API)
        • Services

          • Advisory Services
          • Data and Intelligence Services
        • Elevate your Supply Chain Risk and Resiliency Program

          Schedule Demo
  • Use Cases
        • By Industry

          • Aerospace, Defense, Government
          • Automotive and Industrial
          • Healthcare & Life Sciences
          • High-Tech & Semiconductor
        • By Role

          • Supply Chain Risk & Resiliency Program Managers
        • By Business Need

          • Business Continuity Planning
          • Uyghur Forced Labor Prevention Act (UFLPA)
        • Elevate your Supply Chain Risk and Resiliency Program

          Schedule Demo
  • Resources
        • Learning Center

          • Blog
          • Case Studies
          • Event
          • On Demand Webinars
          • White Paper & Reports
        • Connect

          • Schedule Demo
          • Request Pricing
        • Special Reports

        • Special Report
        • Find valuable resources for managing supply chain disruptions in our Special Reports section.

        • Elevate your Supply Chain Risk and Resiliency Program

          Schedule Demo
  • Company
          • About Resilinc
          • Partners
          • Careers
          • Resilinc In the News
          • Press Releases
          • The Risk Game
        • Elevate your Supply Chain Risk and Resiliency Program

          Schedule Demo
  • Pricing
  • Contact
Login
Schedule Demo
Resilic Logo
  • Solutions
    • Solutions
      • EventWatchAI
      • RiskShield
      • Multi-Tier Mapping
      • CommodityWatchAI
      • Supplier Assessment Library
    • Data Marketplace
      • Autonomous AI Mapping
      • Resilinc Disruption Vulnerability Index
      • R Score
      • Supplier Screening
      • Application Programming Interface (API)
    • Services
      • Advisory Services
      • Data and Intelligence Services
  • Use Cases
    • By Industry
      • Aerospace, Defense, Government
      • Automotive & Industrial
      • Healthcare & Life Sciences
      • High-Tech & Semiconductor
    • By Role
      • Supply Chain Risk & Resiliency Program Managers
    • By Business Need
      • Business Continuity Planning
      • Uyghur Forced Labour Prevention Act (UFLPA)
  • Resources
    • Learning Center
      • Blog
      • Case Studies
      • Events
      • On Demand Webinars
      • White Papers & Reports
    • Connect
      • Schedule Demo
      • Request Pricing
    • Special Reports
  • Company
    • About Resilinc
    • Partners
    • Careers
    • Resilinc In the News
    • Press Releases
    • The Risk Game
  • Pricing
  • Contact
  • Login
  • Schedule Demo
Menu
  • Solutions
    • Solutions
      • EventWatchAI
      • RiskShield
      • Multi-Tier Mapping
      • CommodityWatchAI
      • Supplier Assessment Library
    • Data Marketplace
      • Autonomous AI Mapping
      • Resilinc Disruption Vulnerability Index
      • R Score
      • Supplier Screening
      • Application Programming Interface (API)
    • Services
      • Advisory Services
      • Data and Intelligence Services
  • Use Cases
    • By Industry
      • Aerospace, Defense, Government
      • Automotive & Industrial
      • Healthcare & Life Sciences
      • High-Tech & Semiconductor
    • By Role
      • Supply Chain Risk & Resiliency Program Managers
    • By Business Need
      • Business Continuity Planning
      • Uyghur Forced Labour Prevention Act (UFLPA)
  • Resources
    • Learning Center
      • Blog
      • Case Studies
      • Events
      • On Demand Webinars
      • White Papers & Reports
    • Connect
      • Schedule Demo
      • Request Pricing
    • Special Reports
  • Company
    • About Resilinc
    • Partners
    • Careers
    • Resilinc In the News
    • Press Releases
    • The Risk Game
  • Pricing
  • Contact
  • Login
  • Schedule Demo
  • Solutions
    • EventWatchAI
    • RiskShield
      • Supplier Assessment Library
      • Business Continuity Planning
    • Multi-Tier Mapping
      • Resilinc Supplier Network
    • Autonomous AI Mapping
    • CommodityWatchAI
    • Data Products and Offerings
    • Supply Chain Risk and Resiliency
      • Advisory Services
      • Data and Intelligence Services
  • Industry
    • Aerospace and Defense
    • Automotive & Industrial
    • Healthcare & Life Sciences
    • High-Tech & Semiconductor
  • Pricing
  • Resources
    • Learning Center
    • Special Reports
    • Events
    • Developer API
  • Company
    • About
    • Partners
    • News
  • Contact
  • Blog
  • Careers
  • Demo
  • Login
  • Customer Hub

Home / Blogs / Objections to Investing in Supply Chain Risk Management (Part 2)

supply chain risk management

Objections to Investing in Supply Chain Risk Management (Part 2)

Apr 23, 2015

Resilinc

Uncategorized

INTRODUCTION

In Part 1 of this blog post, I discussed five of the six typical objections to supporting investments in supply chain risk management programs and I shared specific remedies. In this post, I cover the last objection: Outmoded thinking and assumptions. 

To review the objectives and key points of Part 1, areas of investment resistance tend to be related to professional incentives, psychology, misperceptions about costs, and a lack of awareness and education. Understanding the role that each of these factors may play and being prepared to neutralize the resulting objections is key to moving your program forward. The first five objection categories discussed in Part 1 included (1) incentives and human nature, (2) dependence on supplier collaboration, (3) perceived cost of achieving supply chain visibility, (4) conflicting objectives, and (5) difficulty in valuing risk management. All objections are discussed in the Ultimate Guide to Supply Chain Resiliency Program Success in the broader context of building a complete business case for a supply chain resiliency program.

Perhaps the biggest challenge in modernizing an organization’s approach to supply chain risk management and resilience practices is overcoming the plethora of outmoded lines of thinking and outdated assumptions. There are several biases, attitudes, and dangerous assumptions underlying common supply chain practices that can devalue or not properly credit risk and resiliency measures. Here are some important myths to be aware of and have a plan to address or contain.

The hero syndrome

Frequently there is a misplaced but abiding faith that “operations will always save the day with another extraordinary diving catch” and that the commodities team can “gut” their way through a problem. Even if this is the case, it’s a very expensive approach to risk mitigation.

“It’s better to be lucky than smart”

Another dubious refrain is “we got lucky that time” rather than recognizing that, more often than not, it was not pure luck that an impact was not felt, but the actions that somebody took to select a supplier located on higher ground or to find an alternate source. Identify the real (proactive) heroes and reward them.

The ostrich approach

Some supply chain stakeholders are under the impression that they can rely on their suppliers to address risk issues, financial, CSR/ethics, etc. in the sub-tiers. According to ChainLink Research, however, audit and regulatory visibility fall off after tier 2. There may be little awareness of the need to take an end-to-end approach which is a fundamental assumption of most supply chain resiliency programs.

The annual planning assumption

Supply chain risk management is treated like other strategic planning exercises, typically with an annual or at the most semi-annual cadence. The reality is that risks are dynamic and constantly changing. You need a process the starts with this assumption.

Rearranging deck chairs

Many stakeholders believe that large disastrous events affect an industry equally. The thought is “we all got hammered and there was no way for anybody to escape the impact so why worry or do anything differently.” There is ample evidence that prepared firms are impacted less and recover quicker and can even use their resiliency to achieve competitive advantage.

Faith in randomness

There is also an assumption that risks are typically isolated and not interlinked. There may be little appreciation for how a resiliency program can ascertain how vulnerabilities that pop up in one area may be symptoms of wider and more systemic issues

The black swam misconceptions

Related to faith in the randomness of events is the major pre-occupation with the so-called “black swan” events (i.e. infrequent disaster scenarios). This has two potential negative impacts on the perceived need to invest in a supply chain resiliency program. First, many believe these “acts of gods” by definition can’t be predicted and planned for, so preparation and mitigation are futile. Rather, these are frequent scenarios that catch supply chain professionals uninformed/unaware. There are in fact early warnings and information foreshadowing most events, yet most organizations have no access or visibility to that data. Second, these events distract from the focus that a resiliency program applies to the smaller, but almost daily, supply events that in aggregate have a larger business impact.

CONCLUSION:

It’s important to be aware of these myths and get ahead of them by talking openly about misconceptions and providing evidence to the contrary or rationale for the new, modern supply chain resiliency line of thinking.

Resilinc Annual Report 2022 - Turbulence

Whitepaper

Cutting-edge Insights from Resilinc's Annual Report 2022

Be Prepared with the Latest Trends and Exclusive EventWatchAI Data to Step Up Your SCRM

Download Now

Recent Posts

Rethinking Black Swan Events for Modern Supply Chain Risk Management

Q&A with 2023 Women in Supply Chain Winner Beth Cook

As the DSCSA Compliance Date Nears, are Pharmaceutical Supply Chains Ready?

Top 5 Aerospace Industry Supply Chain Disruptions of 2023

Panama Canal Drought: Lower Water Levels, Higher Supply Chain Risk

China’s Export Restrictions on Germanium and Gallium  

4 Ways to Develop a Demand-Responsive Supply Chain

Top 10 Supply Chain Disruptions: 2023 Midyear Recap

About Resilinc

We’re the world’s leading supply chain monitoring, mapping, and resiliency solution. Over 100k organizations partner with us to take their SCRM programs from reactive to resilient.
Request Demo

Recent Blogs

Loading...
An image of a black swan amongst a group of white swans
Sep 25, 2023
5 MIN READ
Resilinc Editorial Team

Rethinking Black Swan Events for Mode...

Black swan supply chain events have been traditionally associated with improbable, rare, or unlikely events...
Black swan supply chain events have been traditionally associated with improbable, rare, or unlikely events...
SCRM Best Practices, Supply chain management, Supply Chain Resilience
Q&A with Resilinc's Beth Cook 2023 Women in Supply Chain Winner
Sep 19, 2023
5 MIN READ
Resilinc Editorial Team

Q&A with 2023 Women in Supply Chain W...

Supply & Demand Chain Executive just announced the Women in Supply Chain award winners—and Resilinc’s...
Customer success, Supply chain management
A variety of colorful pharmaceuticals.
Sep 12, 2023
3 MIN READ
Resilinc Editorial Team

As the DSCSA Compliance Date Nears, a...

Supply chain shortages have led to frustration at the pharmacy counter for many this year....
Healthcare, Human Health, Supply Chain Resilience
Read All Blogs

Who's in your supply chain?

Better visibility starts now

Email Now|Call Now|Chat Now

Receive our monthly NewsWatch digest

Subscribe
Resilinc Logo

Most Trusted, Cognitive Supply Chain Risk Management Platform

Solutions

Blog

Careers

Company

  • About
  • News
  • Events
  • About
  • News
  • Events

Resources

  • White Papers & Reports
  • Case Studies
  • On-Demand Webinars
  • White Papers & Reports
  • Case Studies
  • On-Demand Webinars

Follows Us

Facebook-f Twitter Linkedin

Sales: [email protected]
Support: [email protected]
Partnerships: [email protected]

Resilinc Logo

Most Trusted, Cognitive Supply Chain Risk Management Platform

Company

  • About
  • News
  • Events
  • About
  • News
  • Events

Resources

  • White Papers & Reports
  • Case Studies
  • On-Demand Webinars
  • White Papers & Reports
  • Case Studies
  • On-Demand Webinars
  • Solutions
  • Blog
  • Careers
  • Solutions
  • Blog
  • Careers

Follows Us

Facebook-f Twitter Linkedin

Sales: [email protected]
Support: [email protected]
Partnerships: [email protected]

© 2023 Resilinc Corporation. All rights reserved.

Data Security

Privacy Policy

Can Reshoring Stabilize the Semiconductor Supply Chain?

Learn more in our in-depth report about disruptions impacting reshoring growth, the semiconductor workforce gap, and actionable risk mitigation strategies.

           Download Now