Single Point of Failure

About the Author

Gary S. Lynch is the managing director and global leader of Marsh's Supply Chain and Risk Management Practice. He has contributed to the World Economic Forum Global Risks Report and is the author of "At Your Own Risk." Lynch has also appeared on NBC Nightly News, Bloomberg TV, ABC, and CNBC, and his work has been published in CEO Magazine, Shanghai Business Review, and CIO Insights.

Main Idea

In "Single Point of Failure: The Ten Essential Laws of Supply Chain Risk Management," Gary S. Lynch explores the complexities and vulnerabilities of modern supply chains. He emphasizes the importance of identifying, measuring, mitigating, and financing risk to prevent systemic failures. Lynch provides ten vital laws to guide organizations in establishing effective supply risk management programs and making informed decisions to avoid disruptions.

Table of Contents

1. Introduction: Getting to the Truth
2. The Laws of the Laws
3. Law #1: If You Don't Manage and Lead Change, You Have to Surrender to It
4. Law #2: The Paradigm Should Destroy the Parasite
5. Law #3: Manage Your Business DNA in a Petri Dish of Evolving Risk
6. Law #4: In Supply Chain Risk Management, Demand Trumps Supply
7. Law #5: Never Set Up Your Suppliers for Failure
8. Law #6: Managing Production Risk Is a Dirty Job
9. Law #7: The Logistics Risk Management Rule
10. Law #8: Mitigation
11. Law #9: Financing
12. Law #10: Your Supply Chains Are All Independent but Unique

Introduction: Getting to the Truth

Supply chains represent the ecosystem of flows, relationships, infrastructure, labor, assets, technology, and processes that drive a business. They have evolved into complex networks supporting innovation, creation, manufacturing, distribution, and disposal of products. This complexity introduces risks that must be managed to prevent systemic failures.

"Believing that all is well may be a self-deception." – Gary S. Lynch

• Product contamination leading to widespread recalls.
• Natural disasters disrupting supply lines.
• Labor strikes halting production and distribution.

The Laws of the Laws

Lynch introduces the concept of the "risk parasite," a metaphor for the vulnerabilities that exist within every process of a supply chain. These vulnerabilities can cause catastrophic outcomes when triggered. Understanding and addressing these risks are crucial for maintaining a resilient supply chain.

"Risk is a parasite that resides in every process." – Gary S. Lynch

Lynch outlines four core principles to guide the execution of supply chain risk management: