Assessing and managing risk: interview with IBM’s Louis R. Ferretti

thought leaders | The DC Velocity Q & A Five years ago, IBM went in search of a tool to help it better assess the vulnerabilities of its vast global pool of suppliers. When the company couldn’t find what it needed, Lou Ferretti and his team built their own. As supply chains have become more global, the complexities of managing risk across vast and varied physical and political geographies arguably have grown by orders of magnitude. That’s a lesson that IBM, one of the world’s largest technology companies, has taken to heart. Beginning in 2009, the company undertook the task of building a complex supply chain risk management tool, now deployed globally, that provides managers with a way to examine supply risk in a much more robust fashion than ever before. The team that developed the tool was headed by Louis R. Ferretti, the project executive who leads global and strategic programs within IBM’s Integrated Supply Chain business unit and across its global supplier network on environmental compliance, supply chain social responsibility, conflict minerals, business continuity planning, and sustainability as well as risk management. He is also a member of IBM’s corporate crisis management team. Ferretti recently spoke to Editorial Director Peter Bradley about the development and rollout of the supply chain risk management tool. Q: Companies have been talking about risk management for a long time. What led IBM to develop a supply chain risk tool? A: IBM, like others, has always assessed supply chain risk. Typically, we would look at whether our supplier was a single or sole source supplier and whether there was a financial risk associated with that supplier, and maybe we’d look at some logistics aspects. That was the sum total of what was done for our suppliers across the board. But our supply […]