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Mar 8, 2019 · A typical approach for risk identification is to map out and assess the value chains of all major products. Each node of the supply chain—suppliers, plants, warehouses, and transport routes—is then assessed in detail (Exhibit 1). Risks are entered on a risk register and tracked rigorously on an ongoing basis.
Aug 6, 2020 · New research from the McKinsey Global Institute explores the rebalancing act facing many companies in goods-producing value chains as they seek to get a handle on risk—not ongoing business challenges but more profound shocks such as financial crises, terrorism, extreme weather, and, yes, pandemics.
Sep 25, 2023 · Collaboration and digital technology are key to overcoming the four main challenges of supply chain risk management: 1. Establishing Transparency Across Sub-Tiers. Establishing a clear understanding of suppliers through all tiers of the supply chain is fundamental. Disruptions often originate at sub-tier supplier levels.
- Inventory and capacity buffers. Buffer capacity is the most straightforward way to enhance resilience, whether in the form of underutilized production facilities or inventory in excess of safety stock requirements.
- Manufacturing network diversification. In response to the U.S.- China trade war, many companies have begun to diversify their sourcing or manufacturing bases.
- Multisourcing. In 2011, major natural disasters in Japan and Thailand disrupted supply chains across the world and exposed companies’ reliance on single sources of supply.
- Nearshoring. Beyond multisourcing, some companies want to reduce geographic dependence in their global networks and shorten cycle times for finished products.
To make it easier, many supply chain managers categorize risks into six specific groups: 1. Cyber risks. Suppliers using modern technology can face cyber attacks or issues from not meeting cybersecurity standards. These risks can harm both the supplier and the supply chain, indirectly affecting your business.
Effective strategies for mitigating supply chain risks in your business include due diligence, supplier audits, vulnerability analysis and continuity plans. Finally, evaluate your risk appetite, documenting the most significant risks that will require enhanced controls.
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declining over the last decade and global value chains are becoming more knowledge-intensive and reliant on high-skill labor. Finally, goods-producing value chains are becoming more regionally concentrated. This report extends that research to better understand supply chain risk and resiliency.
