After the experience of dealing with a global pandemic such as Covid-19, it has become necessary to take measures to protect against future risks to supply chains from a demand, supply, and financial perspective. This can be done through having a strong and effective supply chain risk management strategy with four key steps:
Detect and document relevant risks: All possible risks need to be identified comprehensively from the supplier, the supplier’s production, or even the service location.
Evaluate the risk: In this step, you need to be able to analyze the individual risk factors, and examine which can become a point of failure in the supply chain.
Observe the risk: Since risks constantly change, it is necessary to continuously monitor how the requirements of customers are evolving in order to maintain an updated and current risk picture.
Reduce the risk: By maintaining regular reviews, you will be able to identify suppliers/suppliers that can pose the biggest risk for your business. Once this is completed, it is vital that relevant risk mitigation plans are created and shared with top management teams.
