Logistics and Supply Chain Management, 6th Edition

Managing supply chain risk

Figure 14.3 below suggests a seven-stage approach to the management of supply chain risk. Each of the seven stages is described in more detail in the following sections.

Figure 14.3 The supply chain risk management process

1 Understand the supply chain

In many companies there is an amazing lack of awareness of the wider supply/demand network of which the organisation is a part. Whilst there is often a good understanding of the downstream routes to market, the same is not always true of what lies upstream of first-tier suppliers. First-tier suppliers are often dependent themselves on second- and even third-tier suppliers ...