Risk management in an evolving global supply chain

Risk management in an evolving global supply chain

The festive season has ended, and the retailers can breathe a collective sigh of relief. Their busiest time of the year means their operations have had to be resilient and robust. The supply chain is at the heart of this and it has been used to plan the Christmas period for months. But what lies at the success of this supply chain and what lessons can be learned?

Managing a supply chain in today’s global economy is fraught with difficulties. Supply chain managers have to maintain a balance of cost, agility, and sustainability, as well as manage the logistics and the manufacturing footprint. All these issues come with their own problems, but overall the trade-off is cost versus risk.

To strike a chord between cost and performance, supply chains have to be inventive. That means essentially going out into new markets, using new local suppliers, and accessing new customers. Invention comes at a cost, as these are new, unexplored areas of risk. So risk management is an important part of supply chain management in a global context.

As organisations strive for new opportunities for a more effective supply chain, so risks are more prominent. Who is that new local supplier? Can they be trusted with your product? The new country you’re now operating from – what are the geographical risks? The political risks? The legal risks?

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