It’s a warm June morning in Omaha, the phone rings and you answer. The man on the other end of the line explains that there has been an explosion at your production site in North Carolina, thoughts race through your mind, first to the safety of your employees, then to the condition of your site. This was the scenario played out by the employees of Con-Agra Foods this past June 9th when an industrial accident caused an explosion that left three employees dead, a large number more severely burned, and the south wall of the building in Garner, North Carolina gone.
As extreme as this example may seem this is just one of many types of unexpected events that occur around the world daily that Companies need to be ready for. Today more than ever in the past, companies are taking the time to identify areas of risk and also what they would do if those events occurred. They are categorizing their risks, determining whether they are discrete or continuous events, and what it would take to recover from them. More and more they are modeling the events and affixing a cost to them in order to better understand the total impact they will have on their businesses.
Risk is something that we should all be aware of and better understand. As a Demand Manager how do you capture risk in your business in your planning? In a lot of companies today, the Sales and Operations Planning meeting has become one area where risk is openly talked about and planned for. This real world discussion helps to keep the business informed and also allows for appropriate scenario planning.
In the AMR Quarterly Study of Risk, Kevin O’Marah highlighted the vast change in the perception of risk by Supply Chain managers in the last 12 months. Supply Chain managers are beginning to move away from IT investment as the best way to mitigate risk toward collaboration and modeling. They are also working to refine and strengthen existing processes to better safeguard against unexpected events. They are also working to better educate and inform their employees about what steps are being taken in regards to Risk and how those employees play a role in the process.
As globalization becomes more and more prevalent throughout our lives, we enjoy the benefits of lower cost goods, but we also live with greater levels of risk in terms of our supplies. This higher level of risk has created a lot of cases for our businesses to get better at this critical part of daily operations. The best news is that we as Demand and Supply Chain professionals have a critical role to play in helping our companies to weather these storms. So I ask are you ready for the unexpected?
The Institute of Business Forecasting & Planning – IBF and I look forward to your comments and thoughts.
Head of Consumer Forecasting
Bayer Crop Science
See CURTIS BREWER Speak at The IBF’S: