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SUPPLY CHAIN MANAGEMENT

HOW WELL DO YOU KNOW YOUR SUPPLY CHAIN


MAY 2015
AUTHOR
Dr Evangelia Komitopoulou
Global Technical Manager - Food

ABSTRACT
In early 2015, SGS invited food industry experts to take part in a
survey Current Industry Practices in Supply Chain Management: How
Vulnerable is Your Supply Chain? This document looks at the subject,
its definition, practices and risk management. We also review the
SGS surveys key findings and aim to provide insight to the risks and
challenges facing the industrys supply chains, as well as examining
their causes and potential impacts.

CONTENTS
I. EXECUTIVE SUMMARY ...................................................................................................................3
II. SUPPLY CHAIN MANAGEMENT: KEY DEFINITIONS & COMPONENTS..............................3
III. SUPPLY CHAIN MANAGEMENT PRACTICES ..........................................................................4
IV. SGS SURVEY ....................................................................................................................................4
V. SUPPLY CHAIN RESILIENCE ..........................................................................................................5
VI. SUPPLY CHAIN RISK MANAGEMENT........................................................................................6
VII. SUPPLY CHAIN TRANSPARENCY..............................................................................................7
VIII. SUPPLY CHAIN COMMUNICATION & COLLABORATION...................................................8
IX. SUPPLIER SELECTION AND APPROVAL PROCESS................................................................9
X. CONCLUSIONS..................................................................................................................................9
XI. REFERENCES....................................................................................................................................10

I. EXECUTIVE SUMMARY
An industry-wide survey on current
supply chain management (SCM)
practices, conducted by SGS, confirms
that although organisations do have
systems and processes in place to
manage their supply chain network,
they are not always perceived to be very
effective.
Participants feel that those systems and
processes in place fail to address supply
chain risks or to ensure transparency
and visibility across the supply chain.
The latter were placed amongst the
top challenges to effective supply
chain management. Overcoming those
challenges requires the ability to:

Identify and implement


sophisticated information technology
tools able to identify, collect, analyse
and report data in real-time

Better appreciate supply chain risks,


incorporating them into supply chain
management strategies

supply chain, sharing important business


and operational information in a timely
manner.

Ensure visibility and information/


knowledge transparency across the
supply chain

There are a number of benefits to


being part of a collaborative supply
chain. The strength of such a chain is
only as good as its weakest links. It is
therefore essential that the appropriate
robust systems are in place to monitor
the performance of individual players.
Poorly performing partners need to
be identified and assisted so that their
performance rating, and subsequently
the performance of the overall chain,
improves and strengthens.

Effective supply chain risk management


strategies require setting up and
implementing the appropriate processes
as well as employing the technology to
sense and respond to events as these
happen. It requires introducing risk and
visibility at the centre of an organisations
supply chain strategy in order to achieve
an agile risk response. Providing supply
chain visibility is a significant challenge
in itself. Achieving the required degree
of visibility is a complex task. It requires
building strategic relationships with
partners and stakeholders across the

II. SUPPLY CHAIN MANAGEMENT:


KEY DEFINITIONS & COMPONENTS
Over the years, food supply chain
management has evolved into a set
of collaborative relationships between
producers, processors, manufacturers
and retailers. This has been driven by
globalisation, technological changes,
changes in consumer lifestyles,
preferences, and regulations. The term
SCM is relatively new, and was thought
to be limited to logistics management.
Over the years though, it has grown
into a complex multifunctional discipline
encompassing procurement, demand
forecasting, distribution and after-sales
care.
As a result of such a rapid evolution,
defining SCM has been challenging;
it means different things to different
people depending not only on their own
experience but also on their position in

the chain. To some, SCM is all about


managing their relationship with their
suppliers and managing their supplier
base. To others, SCM relates to goods
transportation and distribution. It can also
be related to the way different members
of the value chain are integrated in
terms of information and inventory
management systems, while SCM can
also mean the effective managements
of all assets (fixed and variables) required
for running a business.
A definition aimed at distinguishing SCM
from the more traditional approaches
to managing the flow of materials and
raw ingredients states that SCM is
the integrated planning, coordination,
and control of all business processes
and activities in the supply chain to
deliver superior consumer value at less

cost to the supply chain as a whole,


while satisfying the requirements of
stakeholders in the supply chain (In
Trienekens et al., 2014). A comprehensive
definition that incorporates all the
above, defines SCM as the efficient
management of end-to-end process
starting from the design of the product
or service to the time when it has been
sold, consumed and finally disposed
of by the consumer. Such a complex
process includes elements of product
design, procurement, planning and
forecasting production, distribution and
after sales support (Lu and Swaminathan,
2015).

III. SUPPLY CHAIN MANAGEMENT PRACTICES


The commitment to produce safe
products is a shared responsibility and
as such, it needs to include the whole
supply chain. This needs to be clearly
demonstrated through setting up specific
responsibilities and expectations at
all levels of the chain to avoid passing
responsibilities from one partner to
another in the chain.
The holistic concept of end-to-end SCM
has been very popular in the industry and
clearly implies some significant effort
reaching out across the supply chain;
upstream beyond the tier 1 suppliers and
downstream beyond an organisations
main customers, frequently requiring a
high degree of coordination between
tiers. Key questions to be addressed
when discussing integrated supply chains
relate to the management of such a
complex supplier network. What are the

main roles and responsibilities of each


partner in the chain? Who is ultimately
responsible for managing this network
and what tools and approaches can they
use to effectively perform that task?
SCM approaches used by organisations
vary based on their size, operations,
available resources and complexity of
their supply chains. Even though in many
cases holistic SCM is not implemented,
there is evidence to suggest that
internally focused integration attempts
are being made by organisations,
especially those with a global supply
chain scope. These attempts range from
simply appointing senior managers and/
or creating a cross functional team within
an organisation and assigning them
with specific tasks and responsibilities,
to agreeing on and monitoring key
performance indicators (KPIs) between

supply chain partners. The latter usually


taking the form of scorecards used to
drive the management of the supply
chain in a specific direction.
SCM practices are simply defined as
that set of activities undertaken by
organisations aiming to promote the
effective management of their supply
chains. The individual components
of those practices vary from one
organisation to another and differences
in approaches have been documented in
the literature. However, the development
of strategic supplier partnerships, as well
as the level and quality of information
sharing, are amongst the key dimensions
used in measuring SMC practices.

IV. SGS SURVEY- CURRENT INDUSTRY


PRACTICES ON SUPPLY CHAIN MANAGEMENT
This survey aimed to identify
current industry practices on supply
chain management, highlight how
organisations manage their risk exposure
and therefore protect the value of their
business and their brand. It also aimed
to understand industry supply chain risks
and challenges, their cause and potential
impacts.
The survey ran for two months and
attracted 225 individual responses
representing a range of companies,
from finished products to ingredient
manufacturers, covering a number of
different sectors, across 48 countries
around the world. A total of 21 questions
covered some of the key elements of
supply chain management, such as
supplier selection and approval practices,
communication and monitoring and the
available tools, as well as an overview of
industry priorities, challenges and threats
in this area.

Participants were asked to select all


those industries that represented their
operation. The Food and Beverage
industry was represented by 53.3%
of participant companies followed by
final product manufacturers (20%), raw
material manufacturers (15.6%), logistics
and distribution (12.4%), packaging
(12.4%), healthcare, pharmaceutical
and biotechnology (11.6%), consumer
packed goods (9.3%) and retailing (4.4%).
Other industries covering cosmetics,
animal feed, medical gas manufacturers,
catering and agricultural products and
electronic/electrics represented 12.9% of
participant companies.
The majority of organisations operated
global supply chains (50.2%), followed
by national (27.1%), regional (11.6%) and
local (11.1%). The majority of respondents
came from a quality assurance function

within their organisation (40%) followed


by food safety (21.3%), production/
manufacturing (11.1%), regulatory
(5.8%) and procurement (5.3%). Only
5% of respondents represented a risk
management function.

V. SUPPLY CHAIN RESILIENCE


Supply chains are becoming
increasingly sophisticated and essential
to organisational competitiveness.
However, their global nature and resulting
complexity has rendered them more
vulnerable to risk. Given the nature,
size and scope of global supply chain,
companies cannot be expected to
predict and prepare to deal with each
and every possible risk. However, they
are expected to build supply chain
resilience. Supply chain resilience can
be defined in various ways all of which
have a common denominator, the ability
of a system to return to its original state
following a major disruption.

COMPANIES CAN
NOT BE EXPECTED
TO PREDICT AND BE
READY TO DEAL WITH
EVERY POSSIBLE
RISK, HOWEVER THEY
ARE EXPECTED TO
BUILD SUPPLY CHAIN
RESILIENCE

Collaboration the ability to work


effectively and build strategic and
not transactional relationships with
partners across the supply chain

Visibility the ability to track and


monitor events in the supply chain
real time

Operational or other supply chain


changes can affect an organisations
ability to deal with certain issues
and the ability of the organisation to
overcome these challenges is key in
building resilience. Asked to identify
the activities that would most challenge
their organisations ability to prevent and
detect supply chain fraud and abuse,
participants identified new product
development (36%) and engagement
of a new third party supplier or vendor
(32.4%) as the top two activities,
followed by entering a new market
(28.4%) and acquisition of a new entity
(16.9%).

Companies are expected to have


the capability to proactively identify
and address those vulnerabilities in
their supply chains that expose their
businesses to risks above their risk
tolerance. Resilient supply chains are
characterised by four pillars (Deloitte,
2013):

Resilient supply chains are those


supported by a clear governance
structure ensuring not only operational,
but also risk, accountability and
ownership that is underpinned by
key resources (human, process and
technology-based) (Deloitte, 2013).
However, supply chain visibility alone
is not enough to enable a business to
recover from and reduce the impact
of key risks. An attempt to develop
a blueprint for resilient supply chains
identified five key resilience measures in
order of priority (Bhatla et al., 2013):

1.

Improved information sharing

2.

Harmonised legislative and


regulatory standards

Flexibility the ability to be flexible


and therefore quickly adapt and
respond to potential supply chain
issues
Control the ability to have robust
monitoring and control systems in
place to ensure that the appropriate
procedures are followed at all times

Natural disasters have been traditionally


thought to represent the greatest threat
to supply chain resilience followed by
extreme weather, conflict and political
unrest. Asked to identify the biggest
threats to the resilience of their supply
chains, the majority of respondents
to the SGS survey indicated product
tampering and fraud as the primary threat
(55.1%), followed by supplier financial
stability (40.9%), political and social
unrest (37.3%), sustainability (36.9%)
and energy price increase (36.4%).
Changes in the environment (28.9%)
and pandemics (18.2%) were the least
considered.

RISK ANALYSIS AND


PRIORITISATION IS KEY
TO IMPROVING SUPPLY
CHAIN RESILIENCE
The majority of respondents identified
that implementing a supplier risk-based
auditing approach was the first (68.3%)
step to improve supply chain resilience.
This would inevitably require the prior
development of a supplier risk profiling/
mapping (36.6%) and risk register (42%)
while 25% of participants indicated
that supply chain resilience could be
improved by introducing a supply chain
management tool.

3. Building a culture of risk


management across suppliers
4. Common risk assessment
frameworks
5. Improved alert and warning systems

VI. SUPPLY CHAIN RISK MANAGEMENT


A number of definitions of supply chain
risk exist. Supply chain risk has been
defined as the possibility and effect of
mismatch between supply and demand
or as anything that disrupts or impedes
the information, material or product flows
from original suppliers to the delivery
of the final product to the ultimate end
user (In Heckmann et al., 2015).
Risk is a reality for any supply chain,
whether this relates to food safety
and quality, legal, security issues,
regulatory and environmental compliance
challenges, natural disaster or terrorism.
Organisations that operate global supply
chains face the additional risk of supply
disruption as a result of political and
economic instability in a source country,
foreign regulations and economics
changes (e.g. exchange rates), amongst
others.
The potential impacts of supply chain
disruptions on an organisations financial
health and stability, as well as on
business performance and shareholder
value, can be quite disturbing. A study
found that companies that suffered
from a publicly announced supply chain
disruption saw their sales drop by 93%,
their share price volatility increase by
13.5% and shareholder returns up to
40% lower than their peers (Hendricks
and Singhal, 2005).
There are a number of factors that
drive the rise in supply chain risks,
globalisation and global supply chain
connectivity amongst them, that
inevitably increase the complexity
of supply chains and also intensify
the impact of any potential issues.
Practices such as lean manufacturing,
outsourcing and supplier consolidation
have undoubtedly created a lot of
business benefits, such as increased
business agility, and have contributed
towards meeting a common industry
vision of developing an integrated
approach towards end-to-end supply
chains. However, as todays supply
chains have increasingly become an
interconnected network, they have also
become more vulnerable to risks in every
link of the chain. Risk identification and
management would therefore require
a holistic view of the risks across the
whole chain, as well as a formal and
documented process to manage those,
once identified.
6

Despite the importance of identifying and


mitigating risks, published information
highlights an alarming fact.
90% of companies do not formally
quantify risks when sourcing production,
while a typical supply chain manager

ENSURING REGULATORY
COMPLIANCE IS
INDUSTRYS TOP
PRIORITY. REGULATORY
NON-COMPLIANCE IS
INDUSTRYS NUMBER
ONE SUPPLY CHAIN RISK
estimates that just 25% of their
companys end-to-end supply chain is
being assessed in any way for risk. In
93% of cases, risks assessments are
performed using in-house expertise
only, while in the remaining 7% of cases
risks are not considered at all (Dittmann,
2014).
Asked to define the main risks to their

12.9% confirmed that their organisations


lack the required expertise to effectively
management risk across their supply
chain.
Overall, respondent confidence on the
effectiveness of their organisations
approach to supply risk management
was low. Only 18.7% of participants
valued their organisations approach to
identifying and assessing risk as being
a very effective process and only 17%
of respondents thought their approach
to supplier risk rating as well as their
risk based auditing (17.3%) was very
effective. 74% of respondents indicated
their supply chain risk management
and mitigation approach was not very
effective.
The above results highlight an apparent
lack of knowledge and expertise within
industry to manage supply chain risks.
At the same time, supply chain risk
management was a priority for 59.6% of
participant companies and was ranked
at the bottom of the top five priorities.
Regulatory compliance was the top

Supply chain risks with negative impact


66.70%
54.70%

54.20%

52%

49.30%
41.30%

Regulatory noncompliance

Supply interruption

Food safety crisis

Supplier quality
performance

Fraud

Lack of timely and


accurate information

organisations, respondents to our survey


indicated that regulatory non-compliance
was the primary supply chain risk
(66.7%) most likely to have a negative
impact on participant organisations,
followed by supply chain interruption
(54.7%) and food safety crisis (54.2%),
supplier quality performance (52%),
fraud (49.3%) and also lack of timely and
accurate information communication
across the supply chain (41.3%).
Environmental, health and safety-related
risks (36.9%), as well as information
security (16%), were identified as risks
with the least potential negative impact
on organisations.

industry priority (84%), closely followed


by meeting quality specifications
(82.2%), ensuring product traceability
(76.9%) and food safety (72%). Linked
to the above, horizon scanning, which
involves the systematic examination of
information to identify potential threats,
risks, emerging issues and opportunities
came last on the list of priorities (20.9%).

However, 16% of participants agreed that


their organisations underestimate the
potential impact of supply chain risks and

Supply chain risk management


describes the integrated process of risk
identification, prioritisation and either

Given the complexity of supply chains,


it is inevitable and almost expected that
organisations become overwhelmed by
the sheer number of potential risks that
may arise at any time. A disciplined risk
management process should therefore
be put in place.

acceptance, or mitigation, of uncertainty


and risk in the supply chain. Risk
identification (what can go wrong?) often
involves supplier rating programmes,
contingency or early warning systems.
Risk assessment and prioritisation
looks at the likelihood of the risk, the
magnitude and overall impact on the

organisation as well as how quickly


the problem will be discovered. Risk
mitigation practices (which options are
available to mitigate the risks?) focus
on re-evaluating the existing supply
and distribution strategy (e.g. change
in location), and identify the options
available to mitigate the risks, taking

into account the costs and benefits of


each available option (Dittmann, 2014;
Wiengarten et al., 2015).

VII. SUPPLY CHAIN TRANSPARENCY


Transparency goes beyond visibility and
involves the process by which a company
gathers, processes and acts on supply
chain information. It is defined as the
extent to which all of its stakeholders
have a shared understanding of, and
access to, the product related information
that they request, without loss, noise,
delay, or distortion (in Trienekens et
al., 2011). It is therefore an important
capability for companies; essential not
only in logistics management but also
to guarantee food safety, quality and
provenance of all products, food and nonfood, and to all users.

as for complying with new rules and


regulations. Depending on the tool used
to store and handle the data, product
information can be as detailed or as
generic as required and can include
anything from recipe specifications
including sensory attributes, to residue
information (e.g. pesticides, hormones).
Process information mainly includes
the origin of the product and/or its
components as well as the history of the
product, i.e. its trail through the supply
chain, through to storage time and quality
variations between different production
batches (Trienekens et al., 2011).

Mainly driven by consumer need to


have access to information on the origin
of products and the way these have
been produced, an important incentive
in favour of supply chain transparency
has been public health protection by
the timely recall of unsafe products. To
industry this means limiting the impact
of the incident, minimising costs and
protecting the business and the brand.

Apart from the level of information


exchanged, an important requirement to
information transparency is timeliness
and data authenticity and quality.
Integrated supply chain information
tools able to record and process events
and changes in the supply chain in real
time are essential if the benefits of
transparent information exchange are to
be leveraged. An important enabler of
information transparency is the variety of
standards, for example, safety and quality
standards (e.g. BRC, SQF, FSSC, etc.)
that provide access to specific product
and process data.

Transparent knowledge exchange


involves different types of information
covering the process, resource and
product characteristics. This information
exchange is essential to industry for
production management and product
differentiation, traceability, product
recall and crisis management, as well

Asked to identify the type of information


they currently require from their
suppliers, participants to the SGS

survey identified analytical test results


(77.8%), country of origin (76.4%) and
packaging specifications (74.7%), as
the top three types of information,
followed by site certification information
(64.4%) and allergen/free-from status of
ingredients (58.2%) in the top 5. Details
on transportation of goods (56%), recipe
specifications (50.2%) and supplier selfassessment questionnaires (48.9%) were
at the bottom of the list.

THE ABILITY
TO IMPLEMENT
TRANSPARENT
AND INTEGRATED
INFORMATION
TECHNOLOGY
SYSTEMS CAN AFFORD
ORGANISATIONS
A SIGNIFICANT
COMPETITIVE
ADVANTAGE.
The benefit of using sophisticated
IT systems to support SCM was
appreciated by 64.9% of participants
to the SGS survey, who indicated
their organisations see a benefit
to implementing a supply chain
management tool.

Type of information most frequently requested from suppliers


77.80%

76.40%

74.70%
64%
58.20%

Analytical testing
results

Country of Origin

Packaging
specifications

Site certifications

Allergenic / freefrom-status

56.00%

Transportation
details

50.20%

48.90%

Recipe
specifications

Supplier selfassessment Qs

Out of the 34.6% of participants who


indicated that their organisation currently
implements such a tool, only 17.3%
confirmed that it is able to support full
supply chain visibility and transparency
beyond Tier 1 suppliers. In 41.3% of
cases, organisations focus any supply
chain investigations to Tier 1 suppliers
only and 42.2% of respondents indicated
that their organisations currently rely on
Tier 1 suppliers to manage their own
supply chain. Managing Tier 1 and Tier

2-downstream suppliers was a very


effective process for only around 19.1%
and 11.6% of respondents, respectively.
A supply mapping-type SCM tool was
the most popular amongst respondents
(49%), while only 19% and 7.6% of
participants use a risk intelligence datatype tool or predictive modelling tool,
respectively. The two latter tools could
drive more proactive management of
supply chain risks and so their limited
use amongst participants could be

linked with low confidence regarding


the effectiveness of the participant
risk management strategies previously
discussed.

VIII. SUPPLY CHAIN COMMUNICATION AND


COLLABORATION
The development of strategic supplier
partnerships involves a long-term
relationship between an organisation and
its supplier network. This relationship
should leverage the operational and
other capabilities of each organisation to
achieve significant ongoing benefits. Key
in the development of such relationships
is transparency of information and
knowledge, the sharing of critical and
often proprietary information amongst
supply chain partners. Information
sharing is often referred to as a building
block that characterises a solid supply
chain relationship.

POOR COMMUNICATION
& COLLABORATION IS
THE TOP CHALLENGE
TO EFFECTIVE SUPPLY
CHAIN MANAGEMENT
Even though information sharing is
important, it is the quality of such
information that is critical in effective
SCM. Quality of information refers to
the accuracy, credibility, adequacy and

timeliness of information, qualities that


can often be influenced by conflicting
interests and opportunistic behaviours
of partners in the supply chain (Li et al.,
2006).
Building trust and working towards
developing collaborative rather than
transactional relationships, where
sharing information also means
sharing of benefits, is key in effectively
addressing the built-in reluctance within
organisations to share more than the
minimum information.
Participants were asked to identify
how strongly they agree to statements
regarding communication and
collaboration with their supply chain.
43.6% agreed that their organisations
operate defined communication
strategies that involved providing their
supply chain with timely information
that they need to respond to major
incidents (contamination and security).
41.3% of respondents ensured that the
members of their supply chain adopted
such an information communication
strategy too. However, only 19.6% of

respondents believed that their proactive


communication of relevant information
to their suppliers was very effective,
with 7.1% of respondents rating such
communication as not being effective at
all.
Only 36.9% of participants agreed
that their organisations collaborate
with their supply chain with the aim to
improve their safety, quality and security
practices. However, relevant supplier
training and education was part of this
approach for only 20.9% of participants.
This was followed by lack of knowledge
of current and emerging risks (62.8%),
lack of end-to-end supply chain visibility
traceability and transparency (62.3%),
underestimating the potential impact
of supply chain risks (59.2%), poor
risk assessment skills within industry
(56.5%) and lack of risk ownership across
the supply chain (55.6%). Inadequate
technology to monitor and manage the
supply chain was also identified as a
challenge (50.2%), as was the lack of
supplier key performance indicators/
metrics (46.6%).

KEY OBSTACLES
79.40%
62.80%

62.30%

Poor
No knowledge of
No visibility,
communication &
current &
traceability and
collaboration
emerging risks
transparency

59.20%

56.50%

Underestimation
Poor risk
of risk impacts assessment skills

IX. SUPPLIER SELECTION AND


APPROVAL PROCESS
A series of questions aimed to identify
participant supplier selection and
approval processes and highlight those
key factors that mainly define the
supplier selection process. Differences
in approach were identified amongst
respondents, however the results
indicated that only 32% of participants
rated their supplier selection and approval
process as being very effective.
In 60.9% of cases, supplier approval
process included a combination of
sampling and testing. 53.8% indicated
that their list of approved suppliers is
reviewed annually and 51.6 % indicated
that supplier audits cover both document
review and in-factory audits. For 10.2%
of participants, supplier approval process
was not part of their supply chain

management practices.
Participants were asked to identify the
top five factors that affect their selection
of suppliers. Supplier commitment
to quality and safety was top in the
agenda (74.1%) when selecting and
approving suppliers followed by the sites
certification status (64.3%) and suppliers
own technical expertise (62.9%). Supplier
communication and response times
(54%) and suppliers own internal quality
systems (52.7%) were amongst the top
five factors affecting their selection and
approval process.
When asked to identify the top five
supplier conformance issues, participants
rated suppliers inadequate investigation
into the causes of non-conformances

and inability to take corrective actions as


the primary conformance issue (65.8%),
followed by supplier failure to comply to
client specifications (58.7%), lack of or
inadequate supplier personnel training
(52.9%) and failure to ensure effective
implementation of supplier internal
quality (49.3%).
Queried about the way participant
organisations deal with non-compliant
suppliers, only 33.3% of participants
indicated that their organisations have
a defined approach to deal with supply
chain partners who fail to comply with
supply chain safety, quality and security
procedures, and just 28% used a third
party to audit and verify their supply
chain partners.

X. CONCLUSIONS
Supply chain resilience is defined as
the ability of a global supply chain to
reorganise and achieve continuous
delivery of its core functions, despite
the impact of external and/or internal
pressures. Key to building resilient
supply chains is investment (effort and
financial based) as well as cooperation
across the supply chain network. A
number of factors can affect supply
chain resilience, though the results
of our survey indicated that product
tampering and fraud were the number
one threat to supply chain resilience.
Identifying risks and prioritising those
according to potential impact, is a key
approach towards improving supply chain
resilience. Our survey results indicated
that conducting risk audits of key
suppliers, as well as creating a supplier
risk register, are industrys top resilience
improvement practices. However,
participants low levels of confidence in
their organisations current supply chain
risk management practices were quite
alarming.
To achieve effective supply chain
management, organisations need to
take a holistic integrated approach to
managing their supply network. Such

an approach requires establishing


clear supply chain risk ownership,
accountability and management as
well as investing in developing and
implementing the appropriate processes
and tools as key risk management
enablers, not only to identify and monitor
current risks, but also to predict future
ones.
There is a clear need for the development
and implementation of appropriate
systems to assure supply chain integrity,
and therefore supply chain resilience,
throughout manufacturing, distribution
and sale. These involve analytical, horizon
scanning and intelligence gathering tools
able to identify, assess and mitigate
risks. Overcoming supply chain risks
is considered a visibility challenge that
needs to be tackled by more transparent
data communication and effective
reporting capabilities, enabled by
sophisticated operational procedures and
IT tools.

attempts to simplify, harmonise and


standardise industry specifications,
standards and auditing approaches are
significant steps in that direction. Our
industry survey confirms that effective
communication and collaboration across
the supply chain, end-to-end supply
chain visibility, and transparency, as well
as knowledge of current and emerging
risks, are considered to be the three top
prerequisites to effective supply chain
risk management and must-have
requirements for the development of a
resilience framework.

No process or tool, no matter how


sophisticated it may be, can guarantee
the safety and integrity of a supply
chain as complicated as the food supply
chain. However, the development of
better traceability systems, as well as
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XI. KEY REFERENCES


Bhatla, G., Lane, C. and Waln, A. (2013)
Building Resilience in Supply Chains World Economic
Forum, Accenture.

Heckmann, I., Comes, T. and Nickel, S.


(2015)
A critical review of supply chain risk- Definition,
measure and modelling, Omega, 52, 119-132.

Deloitte (2013)

Trienekens, J.H., Wognum, P.M.,


Beulens, A.J.M., and van der Vorst
J.G.A.J. (2011)
Transparency in complex dynamic food supply chains,
Advanced Engineering Informatics, 26(1), 55-65.

Supply chain resilience- A Risk Intelligent approach to


managing global supply chains.
https://www.deloitte.com/view/en_ve/
ve/1224ad675f067310VgnVCM2000001b56f00aRCRD.
htm (Last accessed 8th May 2015)

Hendricks, K.B. and Singhal, V.R. (2005)


An Empirical Analysis of the Effect of Supply Chain
Disruptions on Long-Run Stock Price Performance and
Equity Risk of the Firm, Productions and Operations
Management, Vol 14, No. 1, pp. 35-52, Spring 2005.

Trienekens, J.H., van der Vost, J.G.A.J,


and Vendouw, C.N. (2014)

Dittmann, J. P. (2014)

Li, S., Ragu-Nathan, B, Ragu-Nathan, T.S.


and Subba Rao, S. (2006)

Wiengarten, F., Humphreys, P. And


Gimenez, C. (2015),

The impact of supply chain management practices


on competitive advantage and organizational
performance, The International Journal of
Management Science, 34, 107-124.

Risk, risk management practices, and the success


of supply chain integration, International Journal of
Production Economics, In Press.

Managing Risk In the Global Supply Chain, University


of Tennessee.
http://globalsupplychaininstitute.utk.edu/
publications/documents/Risk.pdf
(Last accessed 8th April 2015)

Global Food Supply Chains, Encyclopedia of


Agriculture and Food Systems, Vol 3, 499-517.

Lu, L. X, and Swaminathan, J.M. (2015)


Supply Chain Management, International
Encyclopedia of the Social & Behavioral Sciences, 23,
709- 713.

ABOUT THE AUTHOR

Dr Evangelia Komitopoulou
Global Technical Manager - Food, SGS
Dr Evangelia Komitopoulou is responsible
for providing technical support to the SGS
global network including the certification
and auditor teams. Evangelia is an expert
food microbiologist with specific areas
of experience in microbiological risk
assessment and specifications, food
processing and preservation. With a
career which includes over 14 years
spent in food technical consultancy,
trouble-shooting and contract applied
research and development, Evangelia
is also the author and editor of many
technical reports and articles.

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ABOUT SGS
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