Managing Risks in the Supply Chain

Managing risks in the supply chain is a necessary evil. To make a difference in your supply chain and manage the complex challenges that come with it, you need to decide what to do about each risk.

The good news is that your options for handling any risk in the supply chain are fairly simple. You have four choices:

• Accept the risk.
• Transfer the risk.
• Avoid the risk.
• Mitigate the risk.

Accept the risk in the supply chain

Even though you know that a risk exists, you don’t always have a good way to resolve it. The risk may be relatively small, for example, or it could be so enormous that it’s impossible to avoid. In those cases, you may decide that the risk is part of the business you’re in and that you’ll deal with the consequences if the risk materializes.

Following are some examples of supply chain risks that you may decide to accept:

• A forklift runs out of fuel in a distribution center.
• A supply chain manager breaks her leg while skiing.
• A giant comet collides with Earth.

Could these things happen? Yes. Do you need to devote effort to preparing a special plan for them? Probably not.

? Read the rest of this article on dummies.com

? Buy the book on Amazon.com

#SupplyChain #SupplyChainManagement #Business #Leadership #Forecasting #ShipsAndShipping #Logistics #Transportation

Who is Mr. Supply Chain?

Daniel Stanton is a supply chain industry veteran and the best-selling author of Supply Chain Management For Dummies He is dedicated to empowering professionals through education and technology. His courses on LinkedIn Learning (formerly Lynda.com) have been viewed over 1 million times, and he's a frequent speaker at educational conferences and industry events.