Risk of supply chain management and mitigation These are the major types of risk in supply chain management and how to mitigate them;
According to Mahadevan 2010, the first one is demand risks which are caused by unpredictable, misunderstood or end -customer demands. To lessen this risk the best possible demand signals should be leveraged. Scenario planning should be made on product and channels optimization to enhance proper cash flow from operators and sales.
Supply risk is caused by the interruptions in the product flow within your supply chain. This is minimized by integrating defined review process in the overall planning process, which should have cash flows and risk curbing strategies (Mahadevan, 2010).
Environmental risk is related to economics, social, government, threats of terrorism and climatic factors. These can be suppressed by institutionalizing a risk assessment process within broad based, neutral international body or expanding the use data sharing risk identification platforms and response (Mahadevan, 2010).
Business risk - this is barred by considering supplier’s financial or management stability, or purchase and sale of supplier companies and putting appropriate measures.
Physical risk - the condition of supplier’s physical facility and regulatory compliance should be adhered to and rules taken and followed.
Manufacturing risk –proper continuity plan and insurance programs should be accomplished before the process and operational disruptions that attributes to interruption of business activities.
Business risks - results from changes in key personnel, management, reporting structures, like mode of communication from purchaser to supplier and customers. Mahadevan 2010 shows that, planning and control risk is due to inadequate assessment and planning which results to ineffective management. Contingency risks are when alternative