Sphera Advances Capabilities with Supply Chain Risk Management (SCRM) Software

Earlier this month, MIT Sloan Management Review covered the topic of resilient supply chains. The piece opened with the observation that companies tend to invest in resilience only after a disruption. The authors noted: “Many companies follow a boom-and-bust pattern, making big investments in resilience after a supply chain disruption and then paying little attention to the issue until the next crisis.”

This reactive approach to supply chain risk management is becoming increasingly risky. For example, look at maritime trade: More than 80% of the volume of international trade in goods is transported by sea, according to UNCTAD, the U.N. body for trade and development. Yet we’ve seen significant disturbances in major shipping routes over the last few years. Geopolitical tensions continue to play out in the Houthi attacks on ships in the Red Sea. And last year, a drought that resulted in low water levels in the Panama Canal caused big headaches for shipping companies. These developments came on the heels of pandemic-related supply chain upheaval that affected companies worldwide.

Even events that are more localized in terms of impact are still very costly. The Francis Scott Key Bridge in the state of Maryland collapsed after a cargo ship collided with it in March, leading to disruptions that were estimated to cost the region up to $15 million in revenue per day.

It’s impossible to predict developments like this. But they happen all the time and the repercussions can be costly. Rather than trying to predict what might come next, it makes more sense to proactively strengthen your supply chain to protect it against a range of potential threats.

Sphera’s Supply Chain Risk Management (SCRM) Software (formerly riskmethods) — part of our Supply Chain Transparency offering — is one of the most robust supply chain risk management solutions on the market today. This AI-powered software helps companies fortify their supply chain against developments such as supplier financial distress, pandemics, labor disputes and natural disasters.

The solution provides timely, relevant information to help organizations manage the wide-ranging factors that can negatively affect their supply chains. With an intuitive interface, the software gives supply chain and procurement managers greater visibility, allowing them to get in front of developments before they cause significant harm. In fact, the solution increases early risk detection by 85%.

Within the SCRM solution there are several modules that enable supply chain and procurement managers to manage and mitigate risk.

Risk Radar profiles and monitors an organization’s supply chain to highlight risk in real time, supporting the creation of a common risk scorecard framework for effective risk management. Risk Radar provides alerts with 99.98% risk relevance for better risk identification and decision-making.

Impact Analyzer assesses suppliers’ criticality and reveals vulnerabilities at the category level. It also allows users to factor in revenue and spend, so they can understand the full extent of the impact if a supplier is affected by an unforeseen event.

Action Planner helps supply chain managers build a risk mitigation plan and carry out tasks using workflow tools that document all actions taken in a risk event.

Sub-Tier Visibility lets organizations map sub-tier dependencies and identify threats in the sub-tiers so they can be addressed before they present a problem.

Compliance Incident Management looks for compliance-related issues in the supply chain, so companies can address potential violations that put them at risk for noncompliance or interfere with internal sustainability goals.

Commodity Risk Tracker allows businesses to monitor critical commodities on a global scale for any potential threats that could prevent access to the commodities they need.

These modules allow companies to address supply chain risk from different angles for a comprehensive approach to risk management that ensures business continuity.

It takes buy-in and a commitment of resources to achieve a more resilient supply chain. The alternative, though, is a compromised ability to overcome supply chain disruptions that are not only expensive but potentially harmful for a brand’s reputation. And it can take far more time and effort to recover from a damaged reputation than an earthquake or the impact of a fire at a supplier facility.

We know that supply chain disruptions are certain, especially with extreme weather events becoming more frequent. Businesses cannot prevent hurricanes or labor disputes on another continent. But they can vastly improve their ability to withstand such risk events with their reputation intact.

In a recent piece in The New York Times, journalist Peter S. Goodman wrote: “The supply chain is like the electrical grid — something we take for granted, as long as the lights turn on when we flip the switch.”

Sphera developed SCRM with decades of subject matter and technological expertise to help businesses ensure that those “lights” stay on, and if they flicker, there’s a plan in place to keep things running. Like our other solutions, Supply Chain Risk Management and Supply Chain Transparency figure largely in our mission to create a safer, more sustainable and productive world.