Economics

Too Much Manufacturing Risk?

There was an interesting piece on FT.com by Jonathan Soble on Jan 4th on the role of manufacturing in Japan. While the US bemoans that not enough is made here, some in Japan wonder the opposite: if they are too exposed to manufacturing as the sole source of competitiveness: Perhaps most worryingly, many in Japan […]

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Economics

The Changing Role of Hedging in Sourcing

A few years ago, the number of Sourcing organizations that had a serious focus on hedging to deal with risk were few and far between. Outside of some specific  industries with a traditional dependence on commodities, few CPO’s were actively sponsoring the development of sophisticated financial risk management teams within their portfolio of responsibilities. A […]

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Economics

The #1 Global Risk of 2011 Is Sticking Around

Late in 2011, Lloyd’s published a survey of global risk that outlined the major risk concerns of business executives around the world. I found the #1 risk on the survey, “Loss of Customers,” quite interesting. The Lloyd’s report describes the problem this way: From concern about the availability of credit, business leaders are now facing […]

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Economics

The Risk of Too Many Choices

Looking back at 2011 one of the most remarkable stories has been the continued decline of Research in Motion (RIM). A recent NY Times piece speculated that perhaps some of the problem lies with the many different models (and their sometimes confusing names) that RIM developed in its push to be more consumer friendly.(1) Ian […]

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Economics

Risk Metrics: Value at Risk (VaR) Models in SCM

One of the more contentious debates in finance over the last couple of decades has centered on the value of what are known as Value at Risk or”VaR” models. Indeed, a VaR model is one of the protagonists in the 2010 film “Margin Call” about the collapse of the housing market. VaR models, originally developed at […]

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Economics

“System D” and Global Supply Chain Risk

Back in January 2011 Wired Magazine ran an outstanding piece by Robert Capps, in which he interviews the journalist Robert Neuwirth about his book, Stealth of Nations: The Global Rise of the Informal Economy.  Neuwirth explains how we came to call such supply chains “System D:” There’s a French word for someone who’s self-reliant or […]

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Economics

Why Most Finance Functions Needs to Take a Second Look at SCM

One of the principal arguments this blog makes is that financial and risk analysis in SCM must develop onto a much higher plane than is common today. A recent paper suggests ways in which this development can take place. A recent paper by Moritz Leon Gomm* notes the following: Finance in general and the capital […]

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Economics

Beyond the Physical World in Procurement Risk Management

It is unusual to scan across a magazine or web site dedicated to supply chain and not find at least one article focused on risk management. However, the great majority of these articles deals with only one of the two aspects of supply chain risk, namely physical risk -the risk of something going wrong with […]

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