Supply Chain Risk Management is a structured seven-step process designed to systematically reduce the risk through comprehensive risk analysis and assessment as well as risk coping and control with appropriate measures.

Once the risk matrix is established, mitigation measures for supply chain disruptions are identified for the highest-priority risks, with the objective of minimizing total cost. A key challenge is determining the suitable level of risk prevention. Effective strategies for managing disruptions in international supply chains include geographic relocation, reduction of dependencies, and cooperation with suppliers.

To ensure cost-effective risk mitigation, each measure’s implementation cost should be assessed in relation to the anticipated financial loss of the associated risk. This structured approach enables data-driven decision-making and efficient resource allocation.