Define Supply Chain Risk Management as the implementation of strategies to manage every day and exceptional risks.
Supply Chain Risk Management (SCRM) is a comprehensive approach to identifying, assessing, and mitigating potential disruptions and vulnerabilities within a company’s supply chain. It involves implementing strategies to manage both everyday operational risks and exceptional, unforeseen events that could impact the flow of goods and services.
Here’s a breakdown of the key aspects:
- Identifying Risks: This involves recognizing potential threats to the supply chain, which can range from supplier failures and transportation delays to natural disasters, geopolitical instability, and cyberattacks. It also includes assessing internal risks related to inventory management, production capacity, and information systems.
- Assessing Risks: Once risks are identified, they need to be evaluated based on their likelihood of occurrence and their potential impact on the business.
This helps prioritize which risks need the most attention and resources.
Supply Chain Risk Management (SCRM) is a comprehensive approach to identifying, assessing, and mitigating potential disruptions and vulnerabilities within a company’s supply chain. It involves implementing strategies to manage both everyday operational risks and exceptional, unforeseen events that could impact the flow of goods and services.
Here’s a breakdown of the key aspects:
- Identifying Risks: This involves recognizing potential threats to the supply chain, which can range from supplier failures and transportation delays to natural disasters, geopolitical instability, and cyberattacks. It also includes assessing internal risks related to inventory management, production capacity, and information systems.
- Assessing Risks: Once risks are identified, they need to be evaluated based on their likelihood of occurrence and their potential impact on the business.
This helps prioritize which risks need the most attention and resources.