With the economic challenges many companies are now focused on concerns that key suppliers will not deliver due to financial challenges. Well what happens when a Volcano in Iceland erupts and shuts down your supply chain? That’s exactly what happened to BMW and many other companies impacted by the recent eruption.

As I sit here in Terminal 5 at Heathrow airport in London I can witness for myself the supply chain disruptions our friends at British Airways are facing. It seems lots of focus around supplier risk is mostly quantitative, around quality or financial data. This is undoubtedly key to the set of metrics around assessing your supplier risk. However how much contingency planning are you doing around these types of unforeseen disruptions?

I am sure no company could have predicted a volcanic eruption but could BMW and others have planned for a prolonged delay in air cargo deliveries? The ability to discover alternative sources of supply in an emergency situation should be a component of your supplier risk program. We can all be hopeful that the ashes coming from Iceland will eventually subside. The key is to make sure when the big one hits your supply chain will not turn to ashes.

Paul Melchiorre is Vice President of Commercial Services Management at Ariba.

Also posted @ Ariba Exchange.