Supply Chain Risk Assessment refers to a systematic process of identifying, analyzing, and evaluating potential vulnerabilities and disruptions in a company’s supply chain. This proactive measure aims to minimize threats such as delays, increase in costs, operational failures, and more. The assessment encompasses a comprehensive review of all aspects of the supply chain, including suppliers, transportation, warehousing, and distribution channels.
The risk assessment process commences with mapping out the entire supply chain, followed by pinpointing areas of potential risk. These risks could range from natural disasters affecting production areas to political instability impacting transportation routes. After identifying risks, the next step is to prioritize them based on their potential impact and develop suitable mitigation strategies. Given its critical role in the seamless operation of businesses, Supply Chain Risk Assessment forms an integral part of risk management strategies in organizations.
