INSIGHT, Inc., top international provider of planning solutions that power supply chain design for the world’s foremost companies, emphasizes the need for new approaches to risk management in strategic supply chain design, given the increasing globalization of supply chain networks.

Each location and transportation link in a supply chain is a potential point of failure or disruption and recent catastrophes have reinforced the need for risk assessment as an integral part of supply chain strategic planning. Yet, recent studies (AberdeenGroup and others) indicate that firms often do not assess these risks. On the other hand, INSIGHT clients enhance both corporate profitability and supply chain resilience with these actions:

- Critically evaluate global sourcing options
- Plan strategically, implement tactically (Plan from the top down)
- Optimize, don’t just automate
- Acknowledge risk and “self-insure” with resilience
- Commit to continuous improvement

“What keeps INSIGHT’s clients at the top of their industries is their recognition of – and response to – supply chain issues, such as globalization risk,” said Jeff Karrenbauer, president of INSIGHT, Inc. “INSIGHT is in the fortunate position of creating strategic design and risk assessment tools coupled with expert consultative support that addresses the most complex and pressing needs of supply chain planners and executive management teams.”

Globalization Speeds The Pace Of Change
It is generally acknowledged that globalization has increased the rate of change, in the form of procurement decisions, strategic outsourcing of manufacturing, alliance partnerships, channel selection, product introductions, mergers and acquisitions, and so on. Yet in spite of these trends many firms cling to the outmoded practice of revisiting supply chain strategy only infrequently, perhaps every five years or so. By way of contrast, the current best practice of leading edge firms includes a program of continuous improvement with strategic reviews conducted on an annual basis, not ad hoc, one-off studies that are all-too-often forgotten.

Globalization is Not a Panacea
Many firms have rushed headlong into new markets and have made major commitments to the global outsourcing of procurement and manufacturing, enticed primarily by labor rate differences and the uninformed commentary of securities analysts. This myopia is gradually being replaced by a more comprehensive analysis which includes the true supply chain impact of such decisions and includes costs such as transportation, in-transit inventory, loss and damage, port handling, duties, and taxes. Some firms are actually reversing earlier global sourcing decisions based on these more sophisticated analyses, because the promised economic benefits vanished. Moreover, such studies properly include a comprehensive supply chain vulnerability audit/risk assessment, together with an explicit development and quantification of risk mitigating strategies. Risks may include political and/or economic instability, currency fluctuations, pandemics, natural disasters, sole or limited sourcing options, and premeditated attacks by intelligent adversaries.

About INSIGHT, Inc.
INSIGHT provides optimization-based supply chain planning and network design software and consulting services developed specifically to meet the dynamic business challenges of globalization, disruptions, and mergers/acquisitions prevalent in today’s business environment. Founded by supply chain and logistics experts in 1978 with the goal of using world-class technology to add intelligence to decision making, INSIGHT solves the supply chain management issues of the world’s foremost companies, including Abbott Laboratories, BASF, Clorox, ExxonMobil, Goodyear, GE, Kellogg, Nestle, PepsiCo, Pfizer, Procter & Gamble, Toyota, and Unilever.

SAILS, INSIGHT’s award-winning flagship product, can accurately represent a company’s current business practices, from raw materials sourcing to capacity planning through delivery to the end customer. The X-System(R), a proprietary optimization engine, powers a family of planning and scheduling solutions, from the design of a global supply chains to crew scheduling, troop deployments, inventory optimization, and transportation procurement. In addition, INSIGHT provides optimization components, partnering with third party software providers to deliver best-of-breed solutions. Our software and services help design optimal supply chain networks that minimize costs and free up capital, streamline operations, maximize profits, and increase customer service levels. For more information, please visit us on the Web at http://www.insight-mss.com/.