Supply Chain Risk Management Solutions To Run Your Business Globally

#Big Data & Highload
#Software Development
March 20, 2020 11 min read

In this article Rocky Osborn, Senior Vice President, Global Business Development & Client Success at Innovecs, a global software development company, provides insights in supply chain risk management, discusses main challenges and solutions, and describes real cases.

In “Supply Chain Risk Management: Advanced Tools, Models, and Developments,” Dr. Yakob Khojasteh assumed that the statement, “all the goods produced can be sold,” is no longer true. Today, production businesses should consider optimal output, supply levels, and apply risk pooling (as a form of risk management) to operate efficiently—because factors such as consumer needs diversification and business competition globalization have decreased product life cycles.

SCRM solutions are demanded on the market since they help companies to evaluate, forecast, and mitigate evolving risks in their developing supply chain networks. The world’s largest logistics companies, such as DHL, provide tools for business continuity planning, logistics control towers, supplier risk management, trade compliance, supply chain insurance, and sustainable procurement.

Software development companies, including Innovecs, can customize your transportation management, assist in collecting data from multiple sources, establish tracking processes, or optimize warehousing.

The company follows best practices in SCRM to enhance business opportunities and decrease risks. So, let’s learn more about modern possibilities in supply chain risk management software implementation.

Risk Management in SCM

Businesses react to global changes arising from utilizing big data, digitization, omnichannel marketing.

In a recent article, Forbes outlines “new worries” and supply chain risks for 2020. The article states that there’s a shift from a strategy to manage risks to “preparing for outright disaster” (to have certain well-working tools to manage unknown risks).

Forbes compared 2017 and 2019 and calculated that the concern for data IT security incidents (worries about cyberattacks or other cybersecurity issues) had increased from 30% to 44% (more respondents specified they considered this risk type, and companies had started to think more about geopolitical issues, such as wars and terrorism and about natural disasters, such as earthquakes or floods, influencing on supplier facilities).

Designing a supply chain risk management plan is critical for risk management to outline policies, procedures, and processes for dependencies and accidents. It records the risks throughout the entire supply chain system (materials procurement, manufacturing, production, goods picking, warehouse trucks loading, distribution, additional equipment installation, shipments, and relationships between supply chain participants, and whatnot).

Here are some potential issues to be considered while managing supply chain risk:

  • The availability of spare parts and raw materials
  • Preventive measures of grey-market parts usage (quality control)
  • Making sure IT-infrastructure is sourced from a robust company
  • Code integrity (revamping software when needed, updating or integrating software modules, for example, WMS integration into the existing ERP)
  • Dealing with operational risks (When there’s rich interconnectivity of many participants failures are possible. They should be managed and prevented somehow.)
  • Detecting vulnerabilities and bugs during shipments
  • Level of foreign services or third-party involvement in operations with the internal company information (preventing fraud risks, arranging security measures)

Supply chain risks can be supplier failures, goods price volatility, or materials shortage. And some years ago, it might have been enough to identify weak chain links and manage them (strengthen collaboration and relationships with the vendors or arrange dual sourcing to prevent ingredients shortage). But now, it’s worth thinking of a strategy for global continuous risk management and software implementation to manage supply chain risks, considering modern challenges (e.g., IoT increased coverage, big data analytics importance, or ML enhancements).

SCRM Software: How It Works

Trusting supply solutions for supply chain risk management is essential. Because businesses are global, it takes a lot of time and effort to check if everything goes smoothly and at an optimum level. WMS modules, ERP, or any other software prevents issues before they occur.

If a third-party company services you with risk management software, it focuses on your objectives: looking for reliable 3PLs or dealing with your operational changes. Omnitracker risk management can be an example. Their product contains the following functions:

  • Smart risks catalog
  • Exact categorization and assessment of risks
  • Definition of measures
  • Automatic measures scheduling

If a company launches risk management software usage, it creates a business process ecosystem for the most efficient workflow. It can be either an automated service desk for the reduction of incoming incident emails or tools for addressing necessary raw materials suppliers; either comprehensive dashboards or powerful reporting systems.

Real Use Cases of SCRM Software

A variety of market players provide SCRM software to gain work cycle efficiency and manage risks.

DHL Resilience 360, which powers Google data center logistics, is an example. The product contains advanced incident management tools and real-time shipment risk monitoring. DHL Resilience 360 provides the technical infrastructure for company data center growth.


QIMA proposes solutions for building an ethical supply chain, where business decisions are made considering workers’ well-being, human rights, and environmental concerns, as well as raw materials sustainability, anti-pollution measures, and waste reduction. They provide product inspections, everything for laboratory testing, container loading check, during-production check, and pre-shipment inspection.


LexisNexis is one of the examples of sophisticated risk solutions. They provide consulting to uncover risks, estimate their possible impact on the enterprise, assists in ensuring compliance and protecting the business.


Innovecs is a potential partner to design TMS and WMS modules, which prevent supply chain incidents or errors from happening, tuning the logistics processes.

To Increase

To Increase presents such SCRM solutions as security compliance, business process management, and mobile activities. The company helps to overcome challenges such as the necessity to get aligned (meet the demands of the legislation, market needs, customers’ expectations), support compliance, and transform processes. Users of these digital solutions gained improved inbound control processes to prevent inventory risks.

So, under the conditions below, market leaders face the necessity to create a more resilient supply chain, operate a global manufacturing base, and deal with a number of supply chain risks.:

  • Digitization
  • The trend of continually moving to the cloud and switching from single- and multi-channel supply to omnichannel supply (which is about the totally similar physical shop and online prices, so people can come, see, and, then, buy the goods on the online store);
  • Growing demand for sustainability
  • Increase in the circular supply chain (in case of which discarded or worn-out products are reused or recycled by the companies into raw materials)
  • Supply chain agility (focus on reliability, consistency and low cost)
  • Increased coverage of IoT;
  • Integrating big data and logistics
  • In the video below, you can see how General Motors shares the experience.

    Advantages of SCRM Software Implementation

    Previously identified risks are easy to measure and address beforehand. For example, if a supplier goes bankrupt, it leads to disruptions in the procurement of raw materials. If a company has additional providers, it helps to manage this risk smoothly. When you know and constantly analyze your customer’s profile, it’s not complicated to react to their pains quickly and in time, boosting the sales.

    Company benefits from SCRM software in the following ways:

    • Possibility of quick reaction to any disaster
    • Avoiding profit losses (e.g. if you lose contact with the 3PL company, the system can search other third-party providers in accordance with the set criteria)
    • Strengthening the corporate image, reacting quickly to negative customer responses, or communication failures
    • Checking the optimum level of production and delivery functioning
    • Maintaining customer satisfaction
    • Meeting and exceeding the rules and legislative standards

    To gain all these benefits, a company should carefully choose a supply chain management software developer. You are welcome to collaborate with Innovecs as well to tailor customized software or to create modules for improving global visibility of your deliveries via a functional tracking system.

    Practical Issues of Supply Chain Risk Management

    After you read about how companies can benefit from the implementation of SCRM software, it’s high-time to notice that when business is growing, it can be complicated to define where to start with SC risk management. So, here are some words about the practical approach.

    American management consulting firm, McKinsey & Company, stated in its report that there are a number of companies that suffered over the last decade from unpredicted supply chain vulnerabilities (they had to perform many recalls costing hundreds of dollars). They specified that governmental organizations and private businesses have struggled with cybersecurity breaches, having lost intellectual property due to supplier ecosystem failures.

    To address this trend (necessity to prevent and deal with the risks associated with information and communications technology), NIST 800-161 as Supply Chain Risk Management Practices for Federal Information Systems and Organisations was developed.

    NIST 800-161:

    • Provided guidance on how to identify, assess and mitigate ICT supply chain risks
    • Integrated information and communications technology risks into the entire supply chain risk management system
    • Became a practical implementation of the NIST/ITL approach, which was the response to the Comprehensive National Cybersecurity Initiative (described on the official website as the initiative to “develop a multi-pronged approach for global supply chain risk management”).

    The NIST (National Institute of Standards and Technology) deals with various supply chain stakeholders, such as government, industry, and scientists to outline and assess the technologies, solutions, tools, and techniques for business security.

    One practical example of how to tune your business supply chain risk management in response to unpredicted disaster is an action plan drafted by the bank of England to”‘head off coronavirus recession.” In collaboration with the government, they developed a step-by-step action plan to support the UK economy and financial system. Risk management plan includes budget refocusing and predictive analyses of the economic consequences in terms of recession.

    Managing known risks and unknown ones differ in practice. Dealing with the known, earlier identified, risks contains the following stages: documenting, building supply chain framework, monitoring risk (some actions are arranged to scan business processes concerning risk factors detection), and establishing risk governance mechanisms (e.g. what must be done in case of unpaid bills occur. NIST 800-161 is an example of risk governing mechanism, too).

    Managing unknown risks includes the building of strong defense components (staff training, cybersecurity protocol implementation), creating risk awareness company culture, establishing clear inbound communications.

    Brief Article Overview

    In this article, I provided you with some glimpses on what supply chain risk management is, how it contributes to your business and addresses the challenges of the modern global market, enlisted some companies that develop supply chain risk management software, shared basic options regarding Innovecs’ expertise in this field.

    So, SCRM is a complex unity of the strategies, which are helpful to manage everyday supply chain risks as well as extraordinary urgent situations and accidental events. It can be helpful in case of unforeseen disasters, expired documents, unavailable transport, or unpaid invoices.

    When you apply software, you gain control over production and delivery; keep your enterprise image safe; deal with cybersecurity breaches; arrange preventive measures due to predictive analyses based on the data collected; preserve money via early risks reactions; meet national regulations and safety standards; and automize product quality control.

    Types of SCRM software can vary (service desk, delivery tracker WMS modules, warehouse mobile applications), but it should be scalable, robust, and consider your business needs. Whatever they are, cybersecurity is essential, because according to the Cyber Security Report, 83% of the companies are hit by up to 50 attacks per month.

    Considering the critical value of cybersecurity, NIST 800-161 Guidance was developed as a set of steps in case of any security breaches. NIST’s approach to SCRM includes organization-wide activities (security measures are performed concerning all business processes and implemented throughout all company systems) and critical systems to define threats.

    No matter what solutions you chose for your company, it’s worth monitoring market trends to be up to date. You should remember that all businesses are going green and taking care of their social impact and sustainability. But to stay focused on producing revenue as the main objective business has to maintain a robust supply chain resistant to risky events. That is the main purpose of SCRM today.

    Rocky Osborn
    SVP of BizDev and Client Success
    Rocky is a result-driven senior management executive who has brought to Innovecs over 25 years of success in a global business strategy, business development, strategic marketing, and client success.
    You may also like: