Speed to market is important in most industries, but in the semiconductor business it is absolutely critical, given that consumer devices like cell phones and laptops go in and out of style faster than yesterday's designer blue jeans. A shipment of wafers, pads, circuits or slurries to make semiconductor chips that shows up late, or not at all, can cause severe customer repercussions that reverberate at the bottom line.

To keep its supply chain from disconnecting, Sun Microsystems Inc., a $14 billion semiconductor, storage and server maker, follows enterprise risk management (ERM) principles. With thousands of suppliers all over the world shipping to its internal plants and contracted external manufacturers, coordinating the logistics to ensure just-in-time manufacturing lies with the company's dozen supply chain managers.

Managing the financial risks of system failure, on the other hand, is the responsibility of Kevin Hoskinson, director of global risk and stock services. "We've broken the seal here to get people to look at the supply chain from a true financial impact versus just a traditional spend approach," Hoskinson says.

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