Knowing how to strategize and prepare for possible disruptions in the supply chain can save you a great amount of time and money. Here are some of the top supply chain risks to watch out for:
- Financial Risks
Financial risks are any types of risks associated with financing and can vary from sudden shifts in exchange rates to a supplier’s bankruptcy. They can also include unforeseen costs, missed milestones, budget overruns, and other risk factors.
- Data Quality and Integrity
Data integrity refers to the quality of data used in supply chain management statistics. Incorrect freight procurement data can minimize profits and increase the chances of failure in the shipping industry. Moreover, many companies will likely hide their information from others, which increases data breaches and other risks. However, they can avoid them by sharing information with only trustworthy supply chain partners.
- Environmental Risks
Numerous unpredictable environmental risks like floods, earthquakes, and other extreme weather conditions can affect the supply chain as well. While natural disasters are hard to predict, companies can still take action to reduce damages. For example, adopting an effective communication system can help track all damages and can also come in handy when trying to execute a backup plan.
- Supplier Risk
Suppliers often rely on one another when it comes to service execution and delivery. In this case, problems may arise if a supplier fails to deliver the correct amount of products due to bankruptcy or other factors.
You can reduce supplier risks by adopting an extensive onboarding and tracking process and collaborating with only trustworthy suppliers. Building a good rapport with your supplier and creating a diverse supplier network may also help prevent such risks.
- Cyber Attacks
As technology evolves, so have cyberattacks. They have quickly become a predominant risk in the modern supply chain, with hackers attacking and bringing down supply chain networks and increasing freight rates. Thus, it is vital to take necessary steps like restricting personnel access and maintaining physical security to protect your business.
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