What is supply chain risk management? It is the sustainable reduction of risk through risk analysis and evaluation as well as identification and implementation of appropriate measures.
See image above for complete definition. Supply chain risk management is a circular process where risk assessment, risk analysis and risk coping and control come one after another in an endless cycle.
The cycle consists of 7 steps: risk identification, risk classification, risk evaluation, identification of measures, evaluation of measures, implementation of measures, risk control, after which the cycle repeats itself.
Inputs for the process include various tools such as SWOT analysis, expert interviews and internal and external data. Moreover, scenario technique and cross-functional teams help strengthen the process. Lastly, preventive measures and other measures, such as a business continuity plan, help lower the overall risk.
