Companies with extensive logistics strategies may want to employ more stringent risk management, background checks and credit reports in coming months, as a new study shows mounting economic uncertainty is broadening risk in the supply chain.
According to a survey by KPMG, nearly half of retailers and manufacturers - 44 percent - cite global market uncertainty as the biggest risk facing their companies. Twenty-seven percent of respondents pointed to worldwide political instability. U.S. firms have been forced to adopt more stringent risk management policies in recent years, not merely in regards to finances and credit decisions, but for procurement, sales revenue and environmental threats as well. With disruptions to business operations due to a slew of natural disasters in 2011, organizations are looking to curb risk wherever possible to improve performance. "Both manufacturers and retailers with their diverse distribution networks and complex supply chains are often exposed to a wide variety of risks, especially those operating internationally," said Gerry Penfold, risk consulting partner at KPMG. "Traditionally, however, they have been less inclined to undertaken risk reviews at an enterprise-wide level."