Adoption and spending on operational risk management will increase substantially in 2007
Risk management has emerged as a critical discipline due to the business need for global sourcing strategies, increasingly complex contract manufacturing relationships, and the greater number of natural and political events that can disrupt the supply chain. "As firms move to leaner operating models and leverage global sourcing models, uncertainty in both supply and demand is growing along with supply chain complexity," said Mark Hillman, research director, AMR Research. "As a result, the need to manage risk, specifically in supply chain, is on the rise." For firms in many industries, external events are largely responsible for the greater corporate focus on managing risk. The survey results reveal that supplier failure and continuity of supply is the number one risk factor for 28 percent of firms. Additional survey results include: - 33 percent of firms say they have dedicated budget line items for supply chain risk management activities. - 54 percent of firms plan to increase their budgets for operational risk management over the next 12 months. Of those firms, the average spending increase will be 17 percent year over year. - The top areas of application spending to support supply chain risk management are sales and operations planning, inventory optimization, business intelligence and supply chain analytics, and supply chain visibility and event management applications.
•Date: 5th January 2007 • Region: World •Type: Article •Topic: Operational risk |
