Supply Chain Risk - You can't have Vanilla

[James_Marland]

Vanilla is the default choice when choosing ice cream. But Vanilla itself is a critical ingredient, and standard simplistic supplier management may not be enough for your business.

Madagascar produces 80 percent of the world's vanilla. it's the second-most expensive spice in the world, after saffron. It takes three to four years for just the vine to grow. Once they're mature enough, the vanilla orchids bloom. The flowers open only for a few hours and they must be hand-pollinated.

We use the word "vanilla" for something that is common, and 29% of ice cream is flavoured this way with the next highest at 9%. With 1.5 Billion gallons sold in the US alone, That’s a lot of Vanilla.

But back in March, a Category 4 cyclone hit the two main vanilla-producing regions. Eighty-one people lost their lives before it was all over. Around 6,000 others were displaced and the main source of income for the island, vanilla, was hit hard.

Imagine you are a Buyer at Unilever, Hershey’s or Nestlé. When that Cyclone hits, you need to quickly assess the impact on your supply chain, and the likely impact. Maybe there is an alternative source of supply, maybe you can reformulate your recipes or change your product mix. Either way, it’s a classic supply chain risk problem. Getting a few days notice on your competitors could make all the difference in trying to secure stock.

Standard (or vanilla) Supply Management solutions may not be enough for your business.

The growing pace of business, rapid economic changes, and increased regulatory requirements call for supplier risk management to become a natural part of the procurement process to avoid damage to your revenue or reputation.
Yet traditional ("vanilla") supplier management solutions can't deliver a comprehensive solution because risk information is fragmented across processes and systems, and you may unintentionally engage at-risk suppliers—which can lead to serious supply chain disruptions. Manual risk scoring, which is costly and time consuming, makes it almost impossible to stay well informed about suppliers or market signals.

Integrated Supplier Risk - A new flavour

To protect your organization against supplier risk, your buyers need the ability to make smart, safe, informed decisions during supplier selection, qualification, and segmentation. They also need ways to detect early warning signals and proactively monitor risks for each supplier engagement during the procurement process. And SAP® Ariba® Supplier Risk delivers the resources required to meet these objectives.

For more about SAP's risk solutions, take a look here Or better yet join us at SAP AribaLive in Prague next month where you can meet the time and discuss your requirements in depth.

You can't just go with Vanilla

Thanks to Nate Moon for supplying the story behind this posting.