Integrated Risk Management Processes Across the Supply Chain

risk management

While many companies share data with their trading partners, few integrate risk management systems across the board. This is a big mistake. An integrated risk management system is needed to optimize a supply chain’s revenue and performance.


There are several components involved in supply chain risk management. The supply chain must:

  • Identify the risk
  • Assess the risk
  • Manage the risk
  • Implement actions to mitigate the risk

Additionally, the system must assess the impact of the risk.

Assessing Impact

When a risk management system is integrated into the supply chain, trading partners can assess risk based on an unexpected event. Some supply chains can do this in as little as a week while others take longer. The faster it assesses the risk, the quicker the problem can be fixed.


Not only can supply chains bounce back from problems by managing risks, but they can also protect their shareholders and enhance their shareholder value. In addition, they protect their own capital from a volatile market.

How to Implement a Risk Management System

Supply chains need two things in order to implement a risk management system. First, they need visibility. All facets of the supply chain should be fully visible to all trading partners, from the minor to the major. That means trading partners should have access to production information all the way up to sales and customer data. It will be impossible to manage risk if some of the information is hidden.

Second, trading partners need an implementation strategy. This is where supply chains often make mistakes. They think they need to purchase expensive equipment to integrate a risk management solution into their supply chains. That is not the case at all. A cloud-based system can be integrated into existing systems. Then, the system can use proper data collection and analysis tools to implement the risk management system. Information will be sent to managers so they can evaluate the information and make changes as needed. If implemented correctly, this can save companies a lot of money.

Companies should not hide their information from their trading partners. A visible supply chain is an efficient supply chain. It is also a safe supply chain, as long as the right risk management processes are implemented. Once information is visible, it is easy to implement risk management processes so companies can protect their investments across the board. Then, they can become more efficient and powerful in the marketplace.

Charlie Alsmiller

Throughout his career, Charlie Alsmiller has focused on customer problems in difficult industries such as Energy and Telecommunications. Prior to starting Appterra in 2005, Alsmiller was VP of Global Operations for Allegro Development, a leading provider of software for the energy sector. He has also served as president of OmniSpace Technologies, a leading SaaS provider that he founded in 1999. He spent over 10 years in the consulting world with Price Waterhouse and Deloitte Consulting, where he participated in a wide variety of projects for very high profile clients. Mr. Alsmiller holds a BBA from Baylor University in Management and Information Systems and a MBA from the University of Dallas in International Business. Specialties: Technology ventures, Enterprise Software, Contract Negotiation, International Operations, Private Equity, Product Management, Strategic Alliances, Software Implementation, Software Development

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