What is Risk Assessment in Supply Chain?
Risk Assessment in Supply Chain is the process of identifying, analysing, and managing the potential risks and vulnerabilities within a supply chain that could disrupt operations, impact profitability, or harm the reputation of the business.
For supply chain traceability companies, this involves examining various elements of the supply chain, from sourcing raw materials to delivering finished products, to identify potential risks such as supplier failure, regulatory non-compliance, environmental impact, and ethical issues like labour practices and illegal logging.
A thorough risk assessment enables companies to develop strategies to mitigate these risks, ensuring the resilience and sustainability of their supply chains. This can include diversifying suppliers, enhancing transparency and traceability measures, and implementing stricter compliance and sustainability criteria for suppliers. By proactively managing supply chain risks, companies can protect themselves against disruptions, align with global sustainability standards, and meet the expectations of consumers and stakeholders for responsible business practices.
Related terms
Proof of Authority
Proof of Authority (PoA) is a consensus mechanism used in secure digital ledger networks where transactions and block creation are validated by approved accounts, known as validators.
Supply Chain Transparency
Supply Chain Transparency refers to the extent to which a company discloses information regarding the practices, partners, policies, and origins within its supply chain.
Chain of Custody
Chain of Custody (CoC) refers to the process of documenting and verifying the sequence of custody and control over materials and products within a supply chain.