The management of project supply chain risk is an essential part of any project strategy, because the supply chain is bound up with the financial health of your project and your company. The risk management strategies decided upon may determine the degree to which your project reaches the required outcomes in the event of a disruption.
Project supply chain risk management is no longer seen as a reaction to an unexpected problem, but as a strategy and a plan to be put in place before any such problem occurs. Many case studies have shown that there is always risk in the project supply chain, and that its improper management can cripple your project, or in extreme cases cause it to lose money and perhaps close the door on your business. That is why risk management cannot be ignored.
Project supply chain risk management is no longer seen as a reaction to an unexpected problem, but as a strategy and a plan to be put in place before any such problem occurs. Many case studies have shown that there is always risk in the project supply chain, and that its improper management can cripple your project, or in extreme cases cause it to lose money and perhaps close the door on your business. That is why risk management cannot be ignored.
There have been a few events in recent times that have disrupted project supply chains worldwide. Natural disasters, wars, and man-made tragedies all have the potential to do so. Consider the Gulf War in 1990–91, the 1995 earthquake in Kobe, Japan, the terrorist attacks on the World Trade Center in 2001, the great Indian Ocean tsunami of 2004, Hurricane Katrina in 2005, and Hurricanes Harvey and Irma in 2017.
All of the above resulted in loss of life and were tragic in their circumstances; they also all impacted projects and businesses around the world. There have been countless other smaller events that all had their particular effects in certain regions of the world.
The point is not to examine or debate the political or humanitarian aspects of these tragedies, but to open the discussion regarding the unknown risks facing your project supply chain, and how best to prepare for them. We all know that natural disasters or accidents can set off a domino effect stretching across oceans and continents and impacting businesses, suppliers, vendors, end users, investors, and everyone at every step of the project supply chain. Professionals understand that improper risk management strategies can ultimately bring about the failure of a project.
All of the above resulted in loss of life and were tragic in their circumstances; they also all impacted projects and businesses around the world. There have been countless other smaller events that all had their particular effects in certain regions of the world.
The point is not to examine or debate the political or humanitarian aspects of these tragedies, but to open the discussion regarding the unknown risks facing your project supply chain, and how best to prepare for them. We all know that natural disasters or accidents can set off a domino effect stretching across oceans and continents and impacting businesses, suppliers, vendors, end users, investors, and everyone at every step of the project supply chain. Professionals understand that improper risk management strategies can ultimately bring about the failure of a project.
As a responsible project procurement manager, it is up to you to set the right guidelines for supply chain risk management. However, creating such management strategies is not straightforward because it means dealing with the unknown.
In order to define suitable risk management strategies for your project, you should possess the skills and the knowledge needed for the reduction of risk. To start, ensure that you are implementing all the practical guidelines that are effective as well as easy to follow. Beyond that, it may be necessary to take some risk management training, or to carry out some advanced research to gather information about the political, environmental and natural risks in those areas of the world in which you are procuring goods and services.
Having a complete picture of the potential risks will help you to formulate your plan. Accidents can happen anywhere and without warning, but with the right preparation, your project supply chain risk can be minimized or eliminated entirely.
If you are about to start a new project and you have been considering supply chain risk management strategies, then now is the time to make risk management an integral part of your project procurement plan. No company working on projects, whether big or small, can expect to survive and compete in today’s market without having risk management strategies in place.
The challenge facing you is the unknown. What will be the next tragedy? Will it be a natural disaster or a war? Will it be in Europe, or Africa, or right here in Asia? When it happens, will you be ready or not? That is to say, will you merely react to it, or will you have a plan that goes into immediate effect?
In order to define suitable risk management strategies for your project, you should possess the skills and the knowledge needed for the reduction of risk. To start, ensure that you are implementing all the practical guidelines that are effective as well as easy to follow. Beyond that, it may be necessary to take some risk management training, or to carry out some advanced research to gather information about the political, environmental and natural risks in those areas of the world in which you are procuring goods and services.
Having a complete picture of the potential risks will help you to formulate your plan. Accidents can happen anywhere and without warning, but with the right preparation, your project supply chain risk can be minimized or eliminated entirely.
If you are about to start a new project and you have been considering supply chain risk management strategies, then now is the time to make risk management an integral part of your project procurement plan. No company working on projects, whether big or small, can expect to survive and compete in today’s market without having risk management strategies in place.
The challenge facing you is the unknown. What will be the next tragedy? Will it be a natural disaster or a war? Will it be in Europe, or Africa, or right here in Asia? When it happens, will you be ready or not? That is to say, will you merely react to it, or will you have a plan that goes into immediate effect?
