Supply Chain Management Risk Mitigation Definition
In order to properly mitigate risks within the supply chain, it is important to first understand what Supply Chain Management (SCM) is. SCM is ‘the art and science of planning, organizing, and controlling resources needed to produce a product or service.’ In other words, it is the process by which goods and services are delivered from the point of origin to the point of consumption.
There are many risks associated with SCM, such as production delays, quality issues, transportation problems, etc. However, these risks can be mitigated through proper planning and execution.
Some risk mitigation strategies for SCM include:
-Diversifying suppliers: This reduces the reliance on any one supplier and minimizes the impact of supplier problems.
-Improving communication: This helps to ensure that everyone involved in the supply chain is aware of changes or issues that could impact production or delivery.
-Building flexibility into the system: This allows for quick changes to be made in the event of a problem, minimizing the impact on production.
-Implementing quality control measures: This helps to ensure that products meet customer expectations and reduces the chances of customer complaints or returns.
