Providers are undoubtedly important to your business, but they can also cause problems that can affect your daily routine and general reputation in your industry.
When analyzing your supply chain risks, it must be considered that supply chain risks are not only caused by important suppliers. They can also be caused by a second-tier, three tiers, and four-tier suppliers.
Therefore it is important for your company to achieve deeper visibility in its expanded supply chain. To know more about supply chain risk management you can also visit https://www.europeanfinancialreview.com/category/strategy-management/contract-and-commercial-risk-management/.
You must also be able to identify key risks and effectiveness indicators that need to be monitored to avoid unwanted surprises from various aspects of the chain. Here are three solutions you can use to address supply chain risks:
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1. Map and identify dependencies in your extended supply chain – Collect and analyze information from important suppliers in your expanded supply chain to find dependencies.
This can also help you achieve better visibility in your supply chain because you can identify n-level providers, especially those that require high risk.
2. Mapping potential risk areas – Look for countries and markets that can have a significant impact on the supply chain level of each order category. Research is very important to identify all key risk indicators that need to be closely monitored for each category.
3. Monitoring indicators and risk zones and detection of risk signals – In this phase, smart categories are used to enable effective monitoring of the most important risk indicators for each order category.
An effective supply chain risk management framework identifies and monitors various indicators including risks related to markets, resilience, operational risks, geopolitics, and macroeconomics.