Risk management strategies are essential in managing the Supply Chain. Reducing the impact of risks derived from disruptions outside organizations is a process that begins with planning and extends to the implementation of strategies. In this process, one of the first aspects to address before establishing strategies is the evaluation of risks in the Supply Chain.
Supply chain risk assessment
Evaluating the risks in the Supply Chain will allow establishing strategies to minimize them and obtain a clear knowledge of the strengths and weaknesses of each process. In general, most companies take a three-pronged approach to assessing risks:
- Visibility: To access transparent, accurate and timely information to support planning and establishing strategies.
- Resilience: To develop the capacity to withstand and absorb disruptions to ensure that the supply chain is not traumatized and negative impact is minimized.
- Agility: To quickly detect and respond to a disruption and thus reduce the negative impact on the supply chain.
By adapting risk assessment strategies with this approach, it will be possible to improve response capacity and reduce the impact due to disruptive events that may affect the Supply Chain.
It is crucial to note that risk assessment may vary for each organization, depending on factors such as: industry, location, and specific circumstances of each company. Therefore, additional strategies that fit each person’s need and environment should be considered. Some general strategies for risk assessment include vulnerability analysis, which examines relevant factors such as infrastructure, facilities, and critical points in the supply chain.
In addition, the environment must be analyzed, suppliers evaluated and possible internal and external risks considered in areas of direct impact on the Supply Chain, such as inventory and logistics management, and other related areas, such as finance and technology. This will allow a complete assessment of possible disruptions, impacts to the supply chain and response capacity.
The implementation of an adequate risk assessment will provide a specific analysis, adapted to the reality of each organization. From this analysis, rapid response strategies aligned with the Supply Chain and its possible fluctuations can be established and implemented.
References: Gartner
