IP infringement is the new risk category in SCM

Filed in archive Point of view on December 29, 2008

AMR recently published the results of its new supply chain risk management survey and as the result, it was revealed that energy cost is the top concern for supply chain managers. The other categories on the top of the list included:

1. Energy costs
2. Transportation costs
3. Commodity prices
4. Intellectual property infringement
5. Supplier product quality failures
6. Lower consumer spending
7. Supply failures
8. Rising labor costs
9. regulatory compliance
10. Internal product quality failures

However, nowadays, the fuel cost is much lower than 3 months earlier and as a consequence, the transportation cost has decreased, so commodity prices and IP issues seem to be the new elements. I personally think that IP issues are more serious as they are not dependent of the market conditions and they should be solved anyway.

That opens the door for a whole amount of solution vendors and consultants which are offering solutions for contract manufacturing. Companies which are offering the following services have a higher chance of getting new projects:

- The solution providers for design and manufacturing collaborations with suppliers
- The consulting firms which provide auditing services and supplier selection in countries like China with lower risk of IP infringement.
- Contract management solution providers which automate the process of including such terms in existing and new agreements.