Supply chain risk management is on many leaders’ minds right now as companies recover and rebuild after the pandemic. The unprecedented crisis exposed serious vulnerabilities in virtually every supply chain at the worst possible moment, leading to widespread shortages and huge amounts of money lost. Now, supply chain managers ask themselves, what can we do to stop something like this from happening again?
The answer might be hard to hear. The truth is, supply chain risk can never be fully eliminated, only monitored, managed, and mitigated. But in order for that to happen, companies need to adopt a realistic viewpoint on risk and use it to guide every decision they make. If they don’t, the next great disruption may utterly blindside them.
More complicated supply chains come with more risk
As supply networks have become increasingly wide-reaching and complex, the level of risk involved has skyrocketed. Even an isolated event in one region can cause a ripple effect throughout a global supply chain, leading to constraints and delays that can take months to fully recover from.
Since a global network is often the only way to meet the speed and cost demands inherent to modern business, companies will likely be hesitant to scale back. But being aware of the risk their global network exposes them to and taking steps to mitigate it—like finding backup suppliers closer to home, in case of emergency—is essential if they want to keep enjoying the benefits without shouldering too much risk.
New risks are emerging every year
Supply chain risk has always existed, but many of the risks companies have to account for today were not on leaders’ radars even a few decades ago. In addition to long-standing concerns like geopolitical tensions and the possibility of supplier bankruptcy, modern shippers must brace themselves to face contemporary challenges like cyberattacks and climate disasters. And there’s no telling what new risks may be right around the corner.
In an age where supply chain risk is not only constant but always evolving, shippers must stay on their toes. Continuously monitoring the risk landscape, evaluating their operations to identify vulnerabilities, and learning from the mistakes of others is critical. Risk management cannot be something that’s confined to a yearly audit—it must be an integral part of the company’s day-to-day culture.
Keep supply chain risk under control
Supply chain risk isn’t always obvious, and proactive steps to mitigate it won’t always be possible. But by arming themselves with the right tools and fostering a risk-aware culture, companies can put themselves in the best possible position to manage risk and avoid disruptions from turning into disasters.
Data is key. By taking a data-driven approach to risk assessment and management, shippers can more easily identify where their vulnerabilities lie and make informed decisions around known risks.
CTSI-Global can help. Our industry-leading logistics solutions are designed to help companies gain global visibility and do more with their data—while boosting efficiency and reducing transportation costs.
Take a more strategic approach to managing supply chain risk. Contact us today to get started.