Essential to supply chain risk management today is an understanding of the impacts of a single point of failure along the supply chain, no matter the trigger. But how does one plan for this? Organizations today are considering impact scenarios and developing decision models to ensure that supply chain threats and their impacts — real or as yet unimagined — are understood and can be managed. They are also examining in more detail their supplier relationships including contract and balance sheet reviews, compliance with product and worker regulations and standards, how much they are vested in single source suppliers, and more.

2010 has proven to be a banner year for supply chain risk in the news, including:

• the airspace shutdown due to the Iceland volcano;
• earthquakes and other natural disasters in Chile, Haiti, and numerous other countries;
• cargo capacity and pricing issues as shippers seek operational cost savings and begin to "go green";
• supplier viability and vulnerability questions as the world struggles with economic volatility; as well as
• the implementation of tougher product quality standards.

While not all of these events could have been predicted; they could have been planned for. In “Analytics: The Cognitive Process of Effective Supply Chain Risk Management” recently published in the Managing Risk & Compliance report in Financier Worldwide, Gary Lynch examines the tools and techniques being used to assess, measure, manage, and mitigate supply chain risks and their impacts. He also explores how a mix of quantitative and qualitative data is being used in support of strategic, financial, and operational decision making.