Supply Chain Risk
It is said that a business is only as strong as the suppliers it works with. Risk management in the supply chain has become increasingly important as companies both large and small seek to extend their global reach, and with this, comes complexity previously unknown. In order to achieve a holistic Supply Risk function, the following should be transparent and completely visible throughout every tier of the Supply Chain:
- Demand risks - caused by unpredictable or misunderstood customer or end-customer demand
- Supply risks - caused by any interruptions to the flow of product, whether raw material or parts, within your supply chain
- Environmental risks - from outside the supply chain; usually related to economic, social, governmental, and climate factors, including the threat of terrorism
- Business risks - caused by factors such as a supplier's financial or management stability, or purchase and sale of supplier companies
- Physical plant risks - caused by the condition of a supplier's physical facility and regulatory compliance.