Innovative risk management through the supply chain

Posted by KImberly Armstrong on Mar 4, 2012 1:48:00 PM

My Wife Thinks I'm Crazy.

I came home from work a couple days ago and she asked me the usual question. “How was your day?” So I told her, “It was great. I met with the CFO of one of Canada’s largest retailers and they were telling me about all these great supply chain initiatives that were going to save them millions of dollars, but that they were still developing their Risk Management plan and felt Active could be a reliable insurance policy against unforeseen losses.” After snapping out of a blank stare, she called me a geek.

Why I Love Supply Chain

So maybe I am a bit of a supply chain nerd… But my job is far from boring. I mean, once you look beyond the myriad of transport trucks clogging the 401 and the gargantuan warehouses lining our highways, the supply chain world is extremely fascinating and complex. Getting the right number of products to the right place, at the right time, and with limited under/overages is an art.

With the advancement of technology has come the ability to streamline and customize each process in order to maximize the return on total assets. All while ensuring that the retail shelf is full when and where the consumer is ready to make a purchase.

Enterprise Risk Management

But even with today’s JIT (Just-In-Time) inventory control, ASNs (Advanced Shipping Notices), RFIDs (Radio Frequency Tags) and advanced SAP systems, customers still cancel orders, forecasts still exceed demand and product life cycles are still somewhat unpredictable. Hence, on every other corner we see retail outlets advertising “Liquidation Sale” and “Brand Names For Less”.

Companies take risks on inventories. It’s just the way it is. And if you don’t have the odd inventory problem, chances are you could be limiting your scope of innovation. What I see on a day-to-day basis with every single organization I interact with, are solid risk management plans that consider all options: from repackaging the product to charitable donations to friends and family sales to scrap value to liquidation. And many Supply Chain thought leaders are now integrating Corporate Trade as a key component of their risk management strategy.

If you have any tried and true and/or new and innovative risk management tactics I would love to hear about them – email me at


Mike @ Active

Topics: Corporate Trade Industry Report, Risk Management, Supply Chain Management (SCM), Inventory Turnover & Closeouts

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