Chapter 14 of the article by Schlegel and Trent (2014) is about Learning from risk management leaders. Before any company can brag about their prowess in risk management, they always have risk management strategies where some companies achieve distinction in some aspect of their risk management process. And so, the chapter indicates diverse companies that had portrayed their skills and handwork when pursuing SCRM. Some of the companies discussed in this chapter are; Boston Scientific, Cisco, IBM, Boeing, and Delphi. Thus the chapter aims to demonstrate and appreciate what companies are doing towards risk management where people can learn from them hence embracing their strategies towards risk management. As one of the leading risk management companies, Boston Scientific uses; a supply chain management program, a supplier risk wheel as the primary risk tool and Risk Alert and Communications System as ways to help the risk management process.
Boston Scientific Corporation (BSC) was started in 1979 and had 38 employees and $2 million in sales . Currently, the company hold 24,000 employees and more than $7 billion in the sale, making it at the top of the risk management game(Nutt,2006). Thus the company is dedicated to changing people’s lives by producing innovative medication that aids in improving the health of patients globally. And so the company’s portfolio contains more than 15,000 products; however, it faces continuous uncertainties and risks through its supply chain process. Thus, to ensure smooth supply chain operation, the company adopts diverse risk management strategies. Some of these include supplier risk management programs.
As the vital risk management leader Boston has a detailed risk management program that aids in preparing for the unpredicted risk that may encounter in future. The program’s fundamental goal is to help the company move from being reactive risk-takers to proactive towards risk, allowing it to ease its risk exposure. When designing the program, the company used three steps: information acquisitions, where the company was required to gather information from external suppliers and the environment; the second step required compiling the information using primary risk management tools and systems. And the third step was communicating the information to different Boston departments and suppliers.
Apart from developing the risk management program, the company is said to formalize a process to manage supplier risk. And so to aid in developing the process, the company developed a critical risk tool known as Supplier Risk Wheel. This tool was essential for the company because it helps identify high-risk events and risk categories that need action. And so, to identify the risk event, as the wheel indicates, companies can learn from Boston Scientific and start by collecting data and survey forming the outer ring of the Supplier Risk Wheel.
The other tool Boston Company uses to help in risk management is Risk Alert and Communications System. Like Boston, other companies can learn from Boston and develop a system that depends on diverse information sources from aspects such as; government, financial, disasters and market dynamics. This source helps gain information about crucial risks the company may face during supply chain processes.
Being a leader in risk management, Boston faces uncertainties within the supply chain operation, where it uses various measures such as programs, systems and tools to help manage risk. Like Boston Scientific, people should learn to be alert towards risk since it is uncertain when it occurs. To help in risk management, Boston Scientific created; a supply chain management program, supplier risk wheel as the primary risk tool and Risk Alert and Communications System as ways to help the risk management process.
References
Nutt, C. R. (2006). Carnero v. Boston Scientific Corporation: Interpreting the Extraterritorial Effect of the Civil Whistleblower Protection Provision of the Sarbanes-Oxley Act. USFL Rev., 41, 201
Schlegel, G. L., & Trent, R. J. (2014). Chapter 14:Learning from Risk Management Leaders. In Supply chain risk management: An emerging discipline (pp. 267-268).
write