@Risk

Risks associated with the supply chain issues are now top of mind among CFOs, finance directors, and heads of operational risk, according to a recent survey by the Institute of Chartered Accountants in England and Wales and disaster recovery specialist SunGard Availability Services.

More than 70% of those polled said the risk of disruption caused by supply chain issues had dramatically increased over the last year. Likewise, they also cited new concerns over the stability and resilience of smaller supplies and partners during these tough economic times.

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The global risk analyst Maplecroft has released two new reports focusing on human rights in emerging markets.

Maplecroft’s Human Rights Risk Reports for the BRICS (Brazil, Russia, India, China and South Africa) and N-11 countries (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Viet Nam), offer in depth analysis of human rights risks and cover several key areas, including human security, labor rights, civil and political rights, and access to remedy.

About 70% of the Fortune 500 use suppliers located in BRICS and N-11 countries, where tens of millions of the world’s poor live on less than a dollar a day. Even though these emerging markets may have legislation in place to protect workers, local regulatory and enforcement activity are sporadic, at best. That means companies have no choice but to be proactive, working to ensure that human rights are respected and labor standards are protected.
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Earlier this week, the Department of Homeland Security (DHS) and the Information Technology Sector Coordinating Council (IT SCC) released the IT Sector Baseline Risk Assessment (ITSRA), a 114-page document that:

• identifies and prioritizes national-level risks to critical sector-wide IT functions

• outlines strategies to mitigate those risks and enhance national and economic security.

“Private sector owners and operators of this nation’s critical infrastructure manage risk on behalf of their customers and their internal operations every day, and the risk assessment validates the overall resiliency of that infrastructure.  Industry and government, however, need to understand the risk across the entire IT Sector,” says IT SCC Chairman Bob Dix. “This dynamic process and its tangible results provide an opportunity to collectively manage risk at the national level, and we are already working on applying the findings of the IT Sector Baseline Risk Assessment to better mitigate risk, making the IT sector and the nation more resilient and secure.”

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Here’s a new concern to add to your risk management agenda: the threat of the zombie supplier.

According to a post yesterday by James B. Kelleher, the recession has left the supply chain with possibly thousands of suppliers who don’t realize they are “dead.” As Kelleher describes it, these zombie suppliers were abruptly cut off by manufacturers months ago. Now, they are so undercapitalized and overleveraged that they won’t be able to raise the money they need to get their idle plants running again.

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Offshoring has become a major strategic concern of top management, and more than half of companies responding to an ORN survey say they now have corporate-wide strategies in place for guiding offshoring and outsourcing decisions.

But, how will today’s slow global markets and increasing concerns about risk affect offshoring plans?

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