Supply Chain Risk Management
Gain a competitive edge as we mitigate hidden risks and fortify your supply chain
Supply Chain risks currently rank as the sixth most significant challenge for organizations worldwide! Today’s business landscape marked by globalization, interconnected supply networks, and unpredictable external factors, makes Supply Chain Risk Management (SCRM) a vital component of operational strategy.
Adopting a supply chain risk management strategy empowers companies to develop resilience against uncertainty and uphold uninterrupted business operations. Through proactive planning, organizations can circumvent or mitigate disruptions, cut costs, elevate quality, and enhance customer satisfaction. Not just this, SCRM aids in regulatory compliance, safeguards brand reputation, and fosters sustainability initiatives.
How it works?
Our Supply Chain Risk Review screening tool leverages our firm’s established expertise in risk identification, serving as an early alert mechanism to uncover latent third-party risks within supply chains. By detecting potential concerns in advance, our clients can proactively and economically mitigate risks before they impede the smooth flow of information, goods, services, and finances across their global supply networks.
01.
Identify
The first step in our approach to SCRM is to identify all potential risks that could disrupt the supply chain. These risks can include natural disasters, geopolitical instability, economic downturns, supplier failures, quality issues, and cybersecurity threats, among others.
02.
Assess
Once risks are identified, we assess them in terms of their probability of occurrence and potential impact on the supply chain. This involves analyzing the vulnerabilities within the supply chain and understanding the dependencies between different components.
03.
Migrate
After assessing risks, we develop strategies to mitigate those risks. This involves various approaches, including diversifying suppliers, establishing contingency plans, implementing robust quality control measures, investing in technology for real-time monitoring and tracking, and creating buffer inventories.
Types Of Risks We Migrate
Our Supply Chain Risk Review assesses the following categories of third-party risks
- Proactively Identifies Vulnerabilities
- Contractual risks
- Cybersecurity risks
- Data privacy risks
- Fraud risks
- Proactively Identifies Vulnerabilities
- Proactively Identifies Vulnerabilities
- Security risks
- Unidentified vendor risks
- Compliance and regulatory risks
- Proactively Identifies Vulnerabilities
Benefits Of SCRM
Enhanced Risk
Management
By establishing a resilient supply chain, organizations can adeptly identify and navigate risks. Proactive analysis of vulnerabilities and the implementation of robust risk management strategies mitigate the impact of disruptions, including natural disasters, supplier issues, geopolitical events, and pandemics. This approach minimizes downtime, decreases financial losses, and fortifies overall business stability.
Improved Business Continuity
A robust supply chain ensures uninterrupted business operations, even in challenging circumstances. When disruptions occur, organizations with resilient value chains can swiftly adapt by finding alternative suppliers, routes, or production methods. This capability to maintain consistent production and delivery safeguards customer satisfaction, preserves market share, and bolsters competitive advantage.
Strengthened Supplier Relationships
Fostering resilience in the supply chain necessitates collaborative supplier partnerships. Organizations committed to resilience prioritize cultivating strong ties with their suppliers, fostering open communication, trust, and cooperation. These relationships enhance supplier performance, facilitate timely issue resolution, and promote shared risk management, resulting in a more reliable and efficient network.
Cost
Efficiency
Supply chain resilience optimizes costs across the value chain. By identifying and mitigating risks, organizations curtail unforeseen expenses related to disruptions. Resilience also facilitates effective inventory management, ensuring optimal inventory levels to meet demand while averting excess or shortages. Efficient operations, reduced downtime, and enhanced productivity contribute to cost savings and a competitive edge.
Our Strategy
Integration of SCRM into the broader business strategy ensures alignment with organizational goals and seamless incorporation into daily operations.
Leveraging technology, including advanced analytics and IoT, aids in real-time decision-making and enhances visibility across the supply chain.
Compliance with relevant regulatory standards is also considered integral to the SCRM approach, ensuring adherence to industry requirements and geographic regulations.
Leveraging technology, including advanced analytics and IoT, aids in real-time decision-making and enhances visibility across the supply chain.
Compliance with relevant regulatory standards is also considered integral to the SCRM approach, ensuring adherence to industry requirements and geographic regulations.
Losses and
Preparedness
Just Under half of respondents suffered a loss due to supply chain or distribution failure, despite nearly two thirds saying they have plans in place to respond to the risk.
43%
of respondents Suffered a loss from this risk in the 12 months prior to the survey.
Source: Aon’s 2023 Global Risk Managment Survey
63%
of respondents states their organizations were prepared for this risk.
Source: Aon’s 2023 Global Risk Managment Survey