A Risk-Based Approach to Component and Supplier Management


A Risk-Based Approach to Component and Supplier Management: Mitigating Risk with Component and Compliance Intelligence discusses the importance of a structured risk management process to mitigate supply risk and ensure products can be delivered to market reliably and cost-effectively, and the importance of having the right supply chain information to support the process.

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Table of Contents

  • Executive Overview
  • Identifying an Ecosystem of Supply Chain Risks
  • Counterfeits and Fakes
  • Obsolescence
  • Regulatory Compliance
  • Analyzing Risk
  • Mitigating Risk: Knowledge is Power
  • Mitigating Risk: Supply Chain Communication
  • A Product Intelligence Framework for Risk Management
  • Conclusion
  • Recommendations
  • About the Author

Executive Summary

To achieve a sustainable profit, manufacturers must not only develop winning products but also ensure they can be delivered to the market reliably and cost-effectively. Developing and maintaining effective supply chains requires identifying, analyzing, and mitigating risks from many sources. A structured risk management approach helps companies achieve higher product ROI and prevent unexpected costs in today’s complex supply chains despite threats from shrinking component lifecycles, increasingly complex regulations, counterfeiting, and an economic downturn that threatens the health of many suppliers. These issues can drive product shortages, excess expense, risky supply moves, diverting resources from innovation to redesign around supply issues and risk to product quality. No industry, manufacturer, or supplier is immune from these risks.

 Manufacturers need to take a strategic look at supply chain risk. “You have to be as proactive as you can in a lot of different risk areas,” explains Erick Prause, Director of Supplier Development for Jabil, a provider of electronic design, manufacturing and product management services, “as any one of them can be detrimental to your business.” An effective risk management process must:

  • Identify potential risks
  • Analyze risks and their potential impacts
  • Mitigate risk proactively

To support this, companies need to put in place a framework and infrastructure that provides product and component intelligence, including content and communication processes. Without the right information it is nearly impossible to identify, analyze, or mitigate supply chain risk. “We see component lifecycle management and the management of product data and information as critical to our business,” explains Jabil’s Prause, “So we invest in continually improving and sharing product information.

Today’s complex, dynamic supply chains require current, accurate information coupled with bidirectional communication and collaboration. This combination allows companies to mitigate risk and improve supply continuity across their product lifecycles – protecting revenue, avoiding excess expense, and ultimately increasing product profitability.