“supply-chain risk” as the likelihood and consequence of events at any point in the end-to- end

supply chain, from sources of raw materials to end use of customers.  “supply-chain risk
management” as the coordination of activities to direct and control an enterprise’s end-to-end supply
chain with regard to supply-chain risks.

Supplier risk management (SRM) is an evolving discipline in operations management for

manufacturers, retailers, financial services companies and government agencies where the
organization is highly dependent on suppliers to achieve business objectives.

 Supply Risks: This type of risk is occurred due to any disruption in product or a
raw material of the product in the supply chain. It can be a threat to a customer
safety.

Severity of impact - the extent of loss that will be realized should a given risk occur. If what happens,
or fails to happen with a specific supplier, has the ability to dramatically hurt our business then we
need to understand this and develop actions to mitigate or reduce potential impact or at least develop
contingency plans just in case. Severity of impact is determined by considering the different types of
risk and different scenarios within which such risks could be realized and therefore what that would
mean for us. The severity of impact from a supply delay that causes a minor production problem is
very different to having to do widespread product recall due to horsemeat being found in beef-based
food products.

Risk mitigation - actions to remove the risk or reduce it (eg fit a stair gate). Actions here might include:

Contingency planning - Accept that certain risks cannot be mitigated and to plan for and prepare
what we will do should this risk.
ONGOING PROCESS (POINTS) it is a continual process. In practice, this means doing a number of
things continuously, and having a systematic approach to do this in order to understand and assess
changing risk and to be organized to respond to them.

Changing circumstances - keeping a watchful eye on any changes in the supplier's behaviour and
circumstances that might signal a problem, eg chasing payment, downsizing, key individuals leaving
etc.

Keeping close - to the supplier

Supplier assessment - periodic audit or assessment of the supplier's management system,

processes and activities.

External changes - keeping a watchful eye on external environmental changes that might impact this
supplier or our relationship with them so that we are equipped to associate any events in the world
with the potential impact they might bring and identify a new risk. Watch press, media and social media
reports - announcements of new contracts won, expansions, changes in ownership, acquisitions,
mergers, product recalls or safety concerns, all have implications for our supplier