The prune business isn't easy. Sure, once you get the plums dried down to the optimum moisture level, they have a shelf life of three years or more — much longer than many food products. But success hinges on the annual harvest. Everything from volume, size of fruit, and sugar level can affect how well you do, and the profit margin is perilously thin. This market segment is fraught with risk.

"If the yield falls short, we can't just go out and buy more prunes since they've all been spoken for already. If it's a bumper crop, we have to manage that, too," says Harold Upton, vice president of strategic business processes for Sunsweet Growers Inc. "We don't have the luxury of pulling the product off the shelves one year and doubling it the next according to our volume." A grower cooperative, Sunsweet is the world's largest producer of dried fruit, processing more than 50,000 tons of prunes every year, along with apricots and cranberries.

Sunsweet faced two years of disastrously low yields, in 2004 and 2005, immediately following on the heels of the highest-ever surplus in 2003. Management had already decided in 2000 to invest in Supply Chain Consultants' Zemeter supply chain planning suite, which included a sales and operations planning (S&OP) tool. Zemeter allows Upton to model a variety of "what-if" scenarios and plan accordingly. The ability to quantify and mitigate the risk associated with crop yield has helped Sunsweet weather the back-to-back years of low harvests. "We can quickly see the impact as we gain market and crop intelligence, and we can quickly decide what to do," Upton says.

The Zemeter S&OP tool is one type of supply chain risk management (SCRM) software package, according to Kevin O'Marah of AMR Research, which sponsored a conference on global risk management this summer. Other types of SCRM software include supply network modeling and business intelligence tools. SCRM has been getting more attention of late for a variety of reasons, he says.

The proliferation of global sourcing and manufacturing has heightened the risk level for every party in the supply chain. Previously, the chief risk was supplier interruption. Now, whole new classes of risk have sprung up, seemingly overnight: geopolitical, regulatory, logistical, currency-related, natural disaster, as well as the most basic risk: not having the right product in the right place at the right time.

"The old manufacturing world was about big factories in American cities putting out goods. Then the amount of risk was very visible, but limited," O'Marah says. "The geopolitical risks we face today are very different. The risk level is dramatically higher. It's a matter of the much wider dependencies that are outside your immediate control." Also, lean initiatives have reduced the size of the buffer stock that manufacturers hold, ever narrowing the margin for error.

Manufacturers are turning to a variety of software products to insulate themselves from the new risks. That is the only hope manufacturers have of keeping all the variables straight and adjusting their plans accordingly, O'Marah says.

Not surprisingly, no one vendor covers all of SCRM, though the large enterprise vendors, such as SAP AG and Oracle, are moving closer to being able to make that claim.

For the most part, only the larger manufacturers will be able to justify investment in those high-end SCRM tools, as implementations can easily run into seven figures.

"Smaller companies don't have enough complexity to justify a project like this," O'Marah says.