Supply Chain Risk Management:  Five Strategies for Manufacturers

Supply chains are an intricate structure. There are many critical factors that go into a successful supply chain. Due to this, risks run high. In the event that one area runs into an issue, there are ramifications for the entire supply chain. The possibility of challenges is more likely than one might think. Problems can stem out of anything from machine down situations, to cyber attacks, to unforeseen weather patterns. Strategizing, and having proactive solutions will help in the case of a disruption.

supply_chain_managment_laptopRISKS IN MFG

Manufacturing, and many other industries, can break these risks down into categories. A simple way for manufacturing companies to categorize them is as internal and external risks. Internal risks are those that are within company control. This would include things like internal machinery issues, internal business issues, improper planning, and other issues that may come up within the company. These risks are easier to strategize for because how they are handle is within company control.

External risks are out of the hands of the company. This can include anything from weather and environmental risks, to supply and demand fluctuation, to shipping delays. External companies can cause disruptions if products or materials depend on them. These risks are difficult to plan for and deal with due to lack of control.


As difficult as it may be to predict many of these disruptions, it is important to be aware of as many potential problems as possible in order to plan. While there are endless risks in a supply chain that should be planned for, here are 5 important strategies manufacturing companies should be aware of in supply chain risk management.

Assess Risks

Risk assessment is an important strategy to keep in mind. While this may be a difficult strategy given how many potential risks there are, it is crucial to assess as many possible disruptions as possible. You can’t begin to plan until you assess the supply chain and see what and where the biggest risks are.


The next strategy is planning. Based on the prior assessment, manufacturers should plan out what needs to be done in order to avoid supply chain disruptions. One way to plan is having employees aware and trained to deal with any type of supply chain disruption. Anticipation of risks is a huge asset when any type of issue arises. Whether it be environmental issues, or a cybersecurity breech, employees should be trained on what to do in order to proceed with the supply chain.


Diversification is another way to plan for supply chain risk mitigation. Supply chains rely heavily on outside organizations. In the event that one of these organizations is not able to properly function for the supply chain, there should still be other sources able to keep the chain in motion. While production may be slowed down, diversification allows supply chains to avoid any complete halts in production. A diverse supply chain is a strong one.


Acting on the protection of the supply chain is an important strategy. This is essentially implementing the risk protections that were planned when disruptions arise. Acting on a supply chain disruption efficiently is important when an issue arises. Following a supply chain disruption, acting quickly to resolve the issue is one of the best forms of damage control.

Consistently Analyze and Monitor

It is important to constantly monitor and analyze both internal and external risks. This means evaluating the company internally to prepare for any type of disruption, as well as analyzing any outside business involved in the supply chain. This includes monitoring their financial stability, and their ability to manage disruptions. This goes beyond the initial assessment and planning; it should be a continuous cycle. It is important to constantly be aware of the companies and parties you are working with in order to know if they are still the best option for the supply chain. Companies are constantly changing. Because of this, your supply chain options should be adjusted as needed.


Because supply chains are complex, planning and strategizing for a disruption will reduce the risks of a supply chain issue. While there is an abundance of strategies and ways to go about supply chain risk management, knowing these 5 strategies is a great place to start preparing for risk mitigation in a supply chain.


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