I have written about the Cyber-Risk and threats to your reputation associated with social media , because of our increasing dependence on computers and the Internet. Another area where we are all getting more vulnerable is interdependence generally. This is also not new but becoming more important and it leads to:
The Supply Chain Risk.
What this means is that your business could be badly affected, even terminally, because of failings by other organisations you depend on.
When choosing a supplier, therefore, things to ask, apart from price and quality, should include:
- How important is this service to your business?
- How robust is this supplier? i.e. Are they likely to be around for long?
- What risks do they face and how do they manage them?
- What could put them out of business temporarily or worse?
- How easy would it be to switch to another suitable supplier if this one failed to deliver? How long would it take?
- Would you rather use more than one supplier to avoid being too dependent?
It is also worth considering your suppliers’ dependency on others. In some industries you could find all your suppliers’ competitors use the same original source for their essential materials as your present supplier!
You should also consider how much stock you need to hold as a buffer against supply problems.
As we are all increasingly relying on our IT, it is likely that your IT support is one area where you need to look carefully at the supply chain.
This is just one example of the inter-relationship between different risks, and a good reason for reviewing your risks as a whole rather than looking at any one on its own.
And don’t forget all the old risks have not gone away, they have just been joined by newer ones!