Technology essential for risk management methods.

Author:Nisar, Ahsan
 
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Byline: Ahsan Nisar

Any single risk event can wreak havoc on a company's operations, and a combination of multiple issues can totally collapse an organization. The number of potential hazards is growing every year. The first category includes taxes, tariffs, geopolitical issues, natural disasters and other events that fall beyond control of most companies. Tactical issues include problems with the supply base, a customer going out of business, and so forth. The final category includes day-to-day issues like a lack of labor, business process problems or failing internal systems. Following are the top five potential supply chain risks that should be on every company's radar this year.

Fires or explosions

Plant or facility explosions and fires can significantly affect a company's operational capabilities, as well as its employees and customers. Depending on the severity of the event, there may also be legal, media and/or brand issues to deal with. Possible mitigants are better fire alarm system, new sprinklers and/or a more comprehensive hazard insurance policy.

Natural disasters

Hurricanes, tornadoes, wildfires, tsunamis and earthquakes can create major supply chain disruptions. Though complete avoidance may be impossible, having backup sources of supply, using good data backup strategies, obtaining the right insurance coverage and having a disaster recovery plan in place can all help companies stay in business during and after the event.

Cyber threats

Since 80 percent of all cyber security breaches involve supply chain, companies need to conduct cyber risk assessments that include both supplier and customers, all in the name of mitigating the impact of a successful attack.

Transportation disruptions

Port strikes, driver shortages and international regulations like IMO 2020 are going to happen-it's simple a matter of when they happen and how much impact they have on individual shippers. By using cluster analysis and supply chain mapping in combination with real-time alerts, companies will be able to better prepare for potential transportation risk events.

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