Chapter 17

Managing Supply Chain Risks


check Identifying risks to your supply chain

check Prioritizing risks based on severity

check Planning for and responding to supply chain risks

You may have heard the saying, “The best laid plans of mice and men often go awry.” You can build a great plan for how you want your supply chain to work, but you also need to prepare for the inevitable surprises. This chapter explains risk management, a process that you can use to guide your strategy and deal with the problems that your supply chain might encounter. It includes techniques that you can use to identify, prioritize, and manage supply chain risks. You’ll never be able to eliminate all of the uncertainties facing your supply chain, but risk management can give you more control and better options when unexpected events occur.

Challenging Assumptions About the Future

Supply chain plans are built on assumptions about what will happen in the future, and these assumptions are usually based on past experience. For example, if the transit time between one of your suppliers and one of your factories has always been 15 days in the past then you would assume that the transit time will be 15 days for future ...

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