Mitigating Key Supply Chain Risks and Disruptions

Written by Lee Huan Peng, DLM

by Lee Huan Peng, DLM

Supply chain is the network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product, from the delivery of source materials from the supplier to the manufacturer, and eventually delivery to the end user. The key to an efficient supply chain is to make sure that the process runs as smoothly as possible. One needs to follow through each and every step of the process and make sure that things go efficiently and smoothly.

Risk and Vulnerability in Supply Chain

Supply chain risk can be described as the potential loss resulting from a variation in an expected supply chain outcome. It is the mismatch between supply and demand.

Supply chain risk is usually a result of inadequate spend visibility, lack of deep supplier and market information, poor inventory management, poor supplier collaboration, and inefficient coordination heightened by a lack of infrastructure, skills, resources, research, and technology as well as language and cultural barriers.

Risk Management

Supply Chain Risk = Probability of Disruption × Impact

Supply chain vulnerability can be described as an “exposure to serious disturbance, arising from risks within the supply chain as well as risks external to the supply chain” and as “a condition that is caused by time and relationship dependencies in a company’s activities in a supply chain”.

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About the Author: Huan Peng has substantive years of experience in warehouse and logistics management, in particular the supply management of Fast Moving Consumer Goods (FMCGs). He is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). He is currently completing the course on Diploma in Logistics Management (DLM) at SIPMM Academy.

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