Supply Excellence — “Hero Culture” is no way to manage risk

“Hero Culture” is no way to manage risk

November 5th, 2008 · by Justin Fogarty · No Comments · best practices, sourcing, supply management, supply risk

The credit crisis is the supply chain risk getting most of the attention these days. But in the recent online Town Hall forum, IACCM President & CEO Tim Cummins, pointed out another risky behavior that many companies engage in. Tim said a “hero culture”, where saving the company from disaster in the nick of time, cannot continue in this day and age.

It’s a great observation that should have all companies doing a bit of soul searching because I suspect many people in supply chain roles have seen hero culture in their present or former organizations. After all, who gets the glory in the world, the firefighter fighting the wildfire’s flames back from a family’s home? Or the next door neighbor who kept the underbrush clear and planted fire resistant plants so fire never took hold?

If prevention is the best medicine, what are best in class organizations doing to reduce risk?

Well, according to Tim Cummins, they are:

Engaging in SRM efforts that are a “step in right direction.”
Pushing for more collaboration with their suppliers.
Asking, what are the more risky and critical supplier relationships?
And rethinking technology and metrics in order to manage risk better.

Of course, there are still challenges. As Tim described, “contracting roles and relationship roles are understood by many companies. But not all procurement orgs are trusted and have skillset to manage them.” So, it’s not just about asking the right questions. Once you’ve answered those questions, and have an idea of where the risk is to your organization, you must have the talent in place to act on that information.

Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.

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