6 Steps to Develop a Supply Chain Risk Management Framework
Risks have always been a part of global supply networks for ages. Hence, it’s no surprise that as the risk management platforms proliferate, they have begun to address both anticipated and unanticipated risks within the supply network. Such risks have not only prompted procurement officials to focus on developing a secure, high-performing supply chain but have also prevented them from setting a rational procurement objective. Market leaders across industries are on the lookout for an intelligent risk management process that can help them flourish value-added business relationships while minimizing risks and supply disruptions. Here are the six steps to develop a robust supply chain risk management framework:
Step 1: Profile the global supplier base
Step 2: Measure the supply chain vulnerability
Step 3: Evaluate the implications of risks
Step 4: Identify mitigation and contingency actions
Step 5: Analyze supply chain costs and their benefits
Step 6: Implement suitable measures
About the Client
The client- a multinational retail company, headquartered in the UK. The retail company’s operations are spread across regions such as- Europe, North America, Russia, and South Africa.
As the retail industry transforms itself to meet the changing customer expectations its challenges mainly revolve around meeting customer demands while maintaining a good profit margin. The retail company’s risk management process was inefficient as they lacked adequate data collection and consolidation processes. This highlighted the need for implementing a robust risk management framework to anticipate supply chain risks and take appropriate steps to mitigate them. SpendEdge was assigned the task of developing a robust supply chain risk management process to identify and categorize risks based on their priorities.
The rise in competitive pressures, declining profit margins, and diminishing brand loyalty are forcing retail companies to adopt new strategies to remain competitive and profitable. As a result, procurement leaders at retail enterprises are increasingly turning to procurement service providers to reduce costs, manage supply chain risks, and create more business value. The supply chain risk management experts conducted a detailed assessment to identify the possible supply chain disruptions. The six-step risk management framework empowered the retail company to build a plan to deal with the potential supply disruptions.
The supply chain risk management framework empowered the retail company to overcome supply chain disruptions by employing effective risk mitigation strategies. The risk management process helped the client devise the most cost-effective blend of countermeasures to tackle the crucial supply chain risks. For ages, SpendEdge has been developing world-class procurement solutions to help organizations across industries. Our razor-sharp focus coupled with in-depth supply market intelligence enabled us to offer scalable solutions that improved the retail company to save $80M dollars. In addition, the risk management framework also aided the retail company to:
- Define stakeholder concerns
- Identify risk points
- Develop risk mitigation strategies
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