Digitization Creates a Strong Value Chain: Mitigating Risk

Supply chains have been getting more complicated over the past few years, which can introduce more risk.

For example, companies are trying more creative sourcing strategies to qualify for trade preferences, but this broadens the footprint of the supply chain.

More, and potentially new, borders are crossed – both inbound and outbound. The increased government regulations and protectionist/populist measures now become an additional factor to consider.

As we shift from traditional trade lanes like sea/air routings, or multi-country consolidation and deconsolidation, additional service providers and touch-points now become part of the already-complex process. This leads to the need for improved risk management strategies and tools.

Global trade reports consistently show that supply chain executives are concerned with risk and uncertainty from various areas of the supply chain – suppliers, products, cross-border regulations, and brand risk. Good supply chain practitioners are always looking for ways to mitigate risk.

Supply chain risk can be largely grouped into two major categories: unplanned events that disrupt the supply chain and damage to the brand.