For some time I have been interested in both the concept of Risk Management and the technical world of Big Data and I never really thought about how the two could really interact. That changed after watching a 6 minute video interview by Price Waterhouse Cooper on their YouTube Channel. While it makes complete sense that the leveraging of the concepts together would be of extreme benefit, I know from having many Risk Management Conversations with former clients that the reality is, Risk Management is something that is just a necessary evil that only comes into practice when bad things happen.
In the video it was interesting to look at the perspective of mapping Supply Chain Risk down to the individual Suppliers and the Suppliers Suppliers and looking at things like global instability to help build a full “threat map”. Knowing the potential risk before entering into a partnership or supply agreement and knowing that the critical part or product that your company depends on is sourced from a single supplier in say emerging Green Technologies that require the use of one or more Rare Earth Elements that is primarily supplied from China or Africa…this can become problematic to say the least from both perspectives but even more so as we move to more and more instability in global supply chains.
Innovation and survival within business comes from being able to out think, out last and out perform the competition. The use of an effective strategy to ensure business survival can be done both effectively and without breaking the bank but it needs to be a decision made by the business leaders and not forced upon them from an outside force.
The future will also expect that due diligence is done to ensure that a repeat of the “blood diamonds” fiasco of the 90s and 2000s does not repeat if supplies for your emerging business come from Africa. The last thing that any business needs is to be labeled as a supporter of the atrocities that have occurred in areas like The Congo in recent years, and by many accounts that country may have access to a wealth of Rare Earth Elements that our future WILL need.
It is not just in the Electronics industry that this due diligence becomes vital. Look at the Food Industry. Food, Water and Shelter are the three most important things that we need and Food may well be the most over regulated but unmonitored industry out there. We have all walked down the grocery store aisles but how many of us actually look at where the food is actually produced that we buy? I live in an area that has had more than its fair share of Food Industry plant closures recently and I think to the problems that could occur if Heinz Ketchup was now produced in an unregulated factory in China? Sure it would be cheaper…but what about the long term effects (beyond the amount of sugar).
Knowing the risk and acting upon them…that is key for any business large or small.
Take a few minutes to watch the PwC video: