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
Digital Twin
In supply chain management, digital twins can model and monitor supply chain operations, predict outcomes under various scenarios, and optimise performance.
UK Environment Act
The UK Environment Act is landmark legislation designed to address various environmental issues within the United Kingdom, including air and water quality, waste management, and biodiversity restoration.
Accountability
Accountability ensures that companies can verify the integrity of their supply chains, uphold compliance with environmental and social standards, and respond to any discrepancies or issues with honesty and corrective action.