What Are the Best Strategies for Risk Mitigation in the Supply Chain?
Risk management in procurement involves understanding risks that can impact an organisation and implementing strategies to mitigate and manage those risks.
In the supply chain, this encompasses everything from sourcing raw materials to the distribution of the finished product and services across local and international markets.
The current risk climate is at an all-time high due to global events, a climate of political instability and the rise of cyber-attacks - with most organisations slow to implement effective cyber risk management.
Mitigating supply chain risk will therefore help you become more resilient and responsive and give you a strategic advantage over your competitors.
Helping your organisation prepare for supply chain risk management can occur in a number of ways, including an internal and external audit of supply chain risks and strong contingency planning.
Supply Chain Risk Management Tips
- Evaluate and identify current risks, prioritising by probably and impact
- Ensure supplier quality and conduct procurement due diligence
- Diversify your suppliers to minimise risk and increase options
- Include partners in risk planning and bring them close to your organisation
- Purchase insurance and review risks periodically
CIPS Knowledge-related topics, best practice guides and white papers include: risk analysis and management; diligent procurement; fraud and transparency.
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