Policing your supply chain

Well, do you need to police it, or will a strategic partnership relationship work much better? This was one of the questions addressed by our roundtable participants. And it soon became clear that those who see business continuity management as a generic consideration may have to think again. Your strategies depend on the type of industry that you are involved in and how crucial your suppliers really are.

Deciding how crucial a supplier is does not necessarily reflect your spend with them. Problems with a small specialist business supplying an essential component could have more devastating effects on your organisation than problems with a much larger organisation where you have the ability to source elsewhere. Also, if something goes wrong, do you pursue your supplier legally (which could put them out of business and destroy an important link in your supply chain), or take a more benevolent view? How much power do you give to insurers?

Representatives from organisations with major brand names participated in this roundtable discussion. Not surprisingly, their key concerns included reputational risk. But tracking the supply chain back to ensure that everyone is meeting your corporate standards can be difficult. And when you are using suppliers in developing countries, how do you set the criteria? By western standards or by theirs?

I hope you will agree that this was a particularly interesting discussion. It probably throws up more questions than it answers. But they are questions that everyone in risk management needs to be addressing now.