Supply chains were already under pressure before the outbreak of Covid-19. The pandemic intensified stressors such as semiconductor shortages and price increases, and added many more. The just-in-time model died, demand patterns changed, labor became scarce, and Covid-related restrictions caused further complications.
The pandemic brought the importance of supply chain risk management into sharp relief. Anticipating and prioritizing risks, and mitigating those you can, makes the difference between delivering and letting your customers down.
With so many interlinking risk areas, accurately assessing your exposure can seem like a time-consuming, resource-intensive task. However, creating a risk map is easy if you can position risks according to their probable impact. Knowing your company’s risk tolerance allows you to separate risks into those that need mitigating, those that require only partial mitigation, and those that can be accepted.
Although every industry is different, some supply chain factors affect them all. This article covers some of the overarching trends:
- The importance of insightful supplier analysis
- Resilience to withstand external shocks
- The challenges and opportunities of regulation and compliance
- Environmental, social, and governance (ESG) risks in your supply chain
Failure to accurately assess and prioritize your supplier risk exposure can leave your company vulnerable to financial, operational, reputational, and compliance damage.