It’s time to rethink the supply chain

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These days the concepts of “supply chain risk management” and “resilient supply chain” are trending more than ever before. At the same time, companies may or may not have plans for risk management, business continuity or even simple contingency plans to mitigate the impact of external events on their businesses – events such as the current pandemic. In any case, in the coming months one item will certainly be on the agenda of operations managers and supply chain managers alike: Rethink the Supply Chain.

 

But we can’t talk about the supply chain, without addressing supply chain risk, and risk in general.

 

In any given organization, we can classify risk into three categories: internal, supply chain, and external. Internal risks can be further divided into risks linked to operations or management decisions. Instead supply chain risks derive from relationships with business partners, which are also divisible in two subsets: risks associated with suppliers or with customers. Last come external risks (natural phenomena, pandemics, tariff policies, changes to legislation or regulations, and so forth). Of course, individual companies are powerless to mitigate the chances that these events occur, but they can certainly action certain levers to minimize the subsequent impact.

 

 

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