Consumer Goods Companies Slow at Proactively Monitoring Supply Chain Risk

Aug. 26, 2008
Many companies still rely on physically visiting factory to manage risk

Consumer goods companies and retailers are surprisingly placing very little emphasis on proactively monitoring supply chain risk, according to a new study by TradeCard, Inc., a supply chain collaboration platform. The report examined the level of supply chain automation in-place at retail and consumer goods companies to collaborate with trade partners, ensure compliance and handle risk.

"Many companies today still rely on slow manual processes that offer only limited visibility," said Esther Lutz, vice president of business development at TradeCard, Inc. "This lack of visibility leaves them exposed to risk when events requiring rapid change occur. Our study shows most companies are taking a reactive approach to risk, as opposed to a proactive approach that could help minimize the impact of disruption and protect bottom line results early in the cycle."

According to the report, 66% of companies in the consumer goods and retail space rely on physically visiting factories to benchmark suppliers and trade partners, and manage risk; and they rely on fax, e-mail and phone to transact with suppliers.

The report shows 60% of those surveyed identified strategic programs, such as private labels, direct shipments and postponement, as high priority company goals and initiatives. However, the study indicates that many have not put technology in place to support efficient execution of these strategies, exposing risk onto themselves in various forms.

Lutz added, "As companies initiate new overseas sourcing programs they face a number of barriers and heightened complexity. Currencies, customs and time zones are just a few forms of risk to be addressed. Increased complexity of transactions requires companies to change the way they view and assess supply chain risk. A holistic approach that includes all supply chain parties involved in the process and identifies potential weak points can protect the bottom line."

The report can be downloaded free of charge at

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