Analyze the supply chain identify risks at and between each location value at risk to quantify the risk. First, these strategies will enable a supply chain to manage the inherent fluctuations efficiently regardless of the occurrence of major disruptions. From antibribery and corruption laws to sanctions regimes and peps, you need to stay alert to possible threats to your organizations reputation and bottom line. Generally, atomistic sources take only a limited link in the supply chain for assessment, and the approach is used for noncomplex, lowvalue, and highly available materials and components. This paper discusses the scope and impact of supply chain fraud, the areas of vulnerability in the supply chain, and key measures to prevent and detect supply chain fraud. Strategies to minimize the impact of supply chain risk on. When developing mitigation plans, communities should identify ways to ensure the safety and social wellbeing of groups that may be especially impacted by mitigation strategies, including individuals at increased risk for severe illness. It typically includes line managers who doublehat as risk owners for their function, giving them ownership of risk identification and mitigation. Global supply chain risk management is thus critical to many companies, considering that supply chain risk management hereafter, scrm has been developed in recognition of increasing supply chain risks and of the needs for responses to manage them ritchie and brindley, 2007. Mitigation strategies for risk management and sustaina bility in supply chain conference paper pdf available january 2015 with 7,949 reads how we measure reads. A sample of different risks and possible mitigation strategies for handling supply chain risk. Assessing the efficiency of risk mitigation strategies in supply chains. A practical approach to supplychain risk management mckinsey.
Pdf supply chain risk mitigation strategies and its. Risk management strategy should be included in the sourcing strategy, reflecting the overall needs of the organisation. Organizational approach to supply chain risk management at sel, supply chain risk management relies on crossfunctional collaboration, rather than being relegated to a separate department. In the private sector risk management is also of prime concern. Five techniques to manage supply chain risk supply chain. The purpose of this paper is to link humanitarian logistics hl and supply chain risk management scrm to provide an understanding of risk mitigation strategies that humanitarian organisations use, or could use, to improve their logistics preparedness. Four steps to mitigating supplier risk and protect.
Pdf supply chain risk mitigation strategies and its performance. Supply risk mitigation identifying and managing supply. Risk mitigation for diagnostic manufacturers sigmaaldrich. Drawing upon modular system theory 55, 56, we first posit that maintaining modularity between the focal firms internal it systems and its digital supply chain system mitigates the perceived risk of the digital supply chain system and motivates the focal firm to digitize its supply chain operations. The globalization of business increases the level of compliance risk companies face.
Now, as a result of offshore sourcing, manufacturing and assembly, supply. Which strategies tackle identified risks most efficiently. Firms must first identify where a large proportion of. The need for proactive and predictive management strategies is ever present in business today. Ive discussed the first two steps in this process previously on this blog, and today id like to focus on the last and most critical part of the risk management process. Seven supply chain risk factors that affect assessment.
The mitigation of risk in resilient supply chains discussion paper. The secondranked mitigation strategy focuses on compressing global shipping time and cycle time variation. An effective supply chain risk management governance mechanism is a crossfunctional risk board with participants representing every node of the value chain. Mitigate the supply chain risks plan implementation. The interviews identified a number of best practices that may be useful for small registered entities with only lowimpact bes cyber systems to mitigate those risks.
Natural disasters, geopolitical tensions and unacceptable social or environmental practices can endanger supply chains, but the right tools can mitigate the risks. Mitigation strategies for risk management and sustainability in supply chain conference paper pdf available january 2015 with 7,949 reads how we measure reads. Biofuel supply chain risk mitigation strategy framework. Operational risks business continuity risks it risks compliance risks etc. The first lesson is that supply chain disruptions can and do have very large financial and strategic consequences. Risk mitigation strategies the 150 supply chain executives surveyed for my formal research report, managing risk in the global supply chain, use a variety of. Pdf mitigation strategies for risk management and sustainability in.
Supply chain risk management is the intersection of two major fields. Strategies to minimize the impact of supply chain risk on business performance. Assess the supply chain risks prioritize risk for mitigation calculate time, cost, and benefit of mitigation. The sheer size of the shock interconnects all these risks making companies vulnerable to knockon effects source. Supply chain risk mitigation strategies and its performance of smes article pdf available in international journal of pure and applied mathematics 1195. Knowledge of what is being purchased, the composition of foods and products e. Implementation of mitigation strategies for communities with. Arguably visibility of risk with those further down the supply chain is of equal. Supply chain risk mitigation strategies on multiple fronts. Mar 31, 2010 supplier risk management is not a new concept. Aug 28, 2017 when done effectively, employing supply chain risk mitigation strategies can be a true competitive advantage in the contemporary global marketplace, and companies who excel at it will enjoy supply chain security and longterm sustainability for years to come. Related literature in these fields will be used as a research method for this thesis. Mitigation strategies can be scaled up or down depending on the evolving local situation.
Why are modern supply chains seemingly more vulnerable to disruption than ever before. Check out the infographic below for a snapshot of what you face. An analysis of supply chain risk and mitigation strategies. The role of due diligence in mitigating supply chain risk. Experts say you cant tackle supply chain risk with a onesizefitsall approach. Covid19 outbreak poses several organisational risks supply chain, operational, financial and market. Mitigating supply chain risk is a critical component of a companys overall risk management strategy. Request a free demo of our procurement platform to know how supply chain risk mitigation measures will help you tackle the uncertainties in the personal protective equipment market in the wake of. Approach we can work with you to help you understand the risk factors most relevant to your business model supply chain and to unlock the information within your own business. This paper covers a wide range of risks in the global supply chain and offers practical advice regarding risk mitigation strategies and tactics. Enterprises entering new markets often need to form new supplier relationships, engage with stateowned entities, and adapt to local laws and culture. Managing risk in the global supply chain ups capital. Firms face risks in their upstream and downstream supply chains.
A supply chain risk manager must be able to demonstrate why reducing risk is worth the lost opportunity cost of resources or reduced flexibility, and how the risk mitigation tactic promotes organizational and supply chain strategy. The process begins with the selection of vendors, which is a team effort between product development, quality, and purchasing. Impact of covid 19 on the personal protective equipment. Environmental risk mitigation for supply chain operations. Disturbance, supply chain management, mitigation strategies. There are many reasons but some of the main sources of supply chain risk are. The firstranked strategy used to mitigate supply chain risk is to choose financially. Approach we can work with you to help you understand the risk factors most relevant to your business modelsupply chain and to unlock the information within your own business. Oct 06, 2014 to manage supply chain risk in your company, you will have to develop a process to do three things. Without the right environmental risk management strategies, the weather brings your supply chain to a halt. Perform risk assessments of supply chain resilience and mitigation strategies. Apics invited 9,000 members and customers to participate in a survey to examine the role that supply chain risk management plays at an organization, encompassing both practical supply chain risk strategy and increasing risk management maturity. To create supply chain strategies that weigh supply chain risk against the cost of mitigating the risk, firms should emp loy this step by step analytical risk mitigation framework. Review the portfolio and assess implications of the disruption.
Supply risk mitigation identifying and managing supply chain risk. The second lesson is that operational strategies, if correctly designed and implemented, can effectively mitigate the financial and strategic risk associated with supply chain disruptions. Different organisations will apply a range of risk management strategies dependent on their size, sector and complexity of their business and or supply chains. Supply chain risk leaders are actively working to reduce their reliance on sole and singlesourced parts and identify where qualifying additional suppliers that are genuinely independent alternatives ie, they dont rely on the same network of subtier. Toyotas supply chain operations significantly impacted by a natural disaster during the monsoon season of 2011, thailand was hit with severe flooding caused by the landfall of tropical storm nockten. Request a free demo of our procurement platform to know how supply chain risk mitigation measures will help you tackle the uncertainties in the personal protective equipment market in. Pdf strategies to minimize the impact of supply chain risk on. Mar 11, 2015 supply chain risk can be categorized into types of risk and sources from atomistic to holistic.