A basic definition of supply chain is the ‘series of business relationships specific to the production of a product, responsible for bringing a product to market’. The supply chain can be made up of a few entities in a tight regional area, or it can be a broad international network, influenced by a variety of regulatory schemes, customs, and contract specifications.
Supply chain disruptions can have a variety of adverse impacts on an organization, including loss of income, market share, reputation and even decreased shareholder value. They can impact product integrity, weaken infrastructures and even put workers at risk. Costs to respond to supply chain disruptions and continue operations can incur significant extra expense over standard operating expenses. Many companies carry business income insurance, but even with immediate funds available, without adequate planning and actions; a company may close following a disaster or significant supply chain disruption. Industry studies repeatedly show the struggles companies have in recovering from natural and man-made disasters, data breaches and other business interruption events.
While many are aware of the highly publicized large scale events with immediate global supply chain impact, companies face supply chain challenges of varying degrees on a continual basis. In the 2015 Global Cleantech Risk Survey conducted by the Chubb Group of Insurance Companies and Cleantech Group, 61% of the three hundred clean tech executives surveyed had experienced a supply chain disruption in the past three years, with the majority (84%) of these events resulting in an impact on the companies' bottom lines. Yet 70% of companies surveyed did not have a written supply chain disruption plan, which could have mitigated some of the affects. (See Exhibit 1).
The purpose of this paper is to address risks to product and process integrity that can be addressed through supply chain resiliency measures, as well as to highlight the role the safety professional can have in identifying supply chain risks and contributing to the development and implementation of risk reduction measures within their organization.