European businesses are currently going through a massive scandal that has affected millions of people, billions of dollars and thousands of companies. It turns out that some meat packers have been saving money by buying horse meat and mixing it with beef. Schools, hospitals, institutions, cafeterias across the continent are suffering the consequences.
This type of situation outlines the type of risk that businesses need to be wary of: supply chain risk. The cafeteria worker serving mince meat pies at a local hospital doesn’t ever think that horsemeat is mixed in; nor does the cafeteria's purchasing department or the delivery company or the local distributor or the regional distributor or the sales team think that. Frankly, no one along the supply chain things about the risks that can ensue from simply trusting that your upstream supply chain is sound.
Most owners and managers focus on the risks that are present within their company’s walls but few take the time, money and resources to assess supply-chain risk and devise strategies to defend against just this type of situation.
What would you do if your customers accused you of selling counterfeit parts which you sourced from various suppliers? Does your business have a strategy in place for dealing with this? Would you be able to track the culprit? More importantly,what steps are you taking to prevent problem goods and services from entering your business in the first place?
[PwC in the North]
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