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1. What are the sources of risks faced by the global supply chain?

Please respond to both students separately with a minimum of 100 words each.
Original Post: Please answer the following questions after reviewing the reading and lessons for Week 6.
1. What are the sources of risks faced by the global supply chain?
2. How can companies mitigate these risks?
Student Responses
When it comes to a global supply chain, there is many risks involved. When managing a supply chain, you to take into consideration these risks and how they could possibly affect operations. These risks can usually fall in different categories, such as supply risks, demands risks, and operational risks. “The most significant factors impacting supply chain risks are environmental, geopolitical, economic and technological. Each factor has a probability of causing disruptions within global supply chains” ( Environmental risks seem to be the risk that would occur those most, and are not so easy to plan for. Conflicts and trade restriction can be planned for, though they may be difficult, it is something that can be managed, and have the outcome influenced. Economic changes can be compensated for through increased pricing, or by placing pressure on countries or companies who impose undo taxation and tariffs, on short notice or unexpectedly. Companies can also renegotiate tariffs and taxes in order to continue to do business with a company or within that part of the world. Having to take measures to mitigate things such as theft and piracy, can drive up cost, and can have a huge affect on how companies manage the supply chain.
How can companies mitigate these risks?
Ways to mitigate risk can come in various forms. Checking a carriers financial stability, capacity, and performance is something that will need to be watched and evaluated consistently, to ensure the needs of a company are being met. Furthermore, by putting things in writing, ensure companies uphold their end of the agreement, and put risk and financial responsibility where it belongs when things go wrong, or not according to plan. Security at ports and on various mode of transport, can play a key role in mitigating things such as theft and piracy risks. “After the terrorist attacks of Sept. 11, 2001, the International Maritime Organization developed a set of security procedures known as the International Ship and Port Facility Security Code (ISPS). The purpose of the ISPS is to assess and address risks on a case-by-case basis with measures that reduce the threat to, or vulnerability of, ships and ports.” (
As measures are taken to mitigate and eliminate risks, some risks have to be excepted. Not every risk can be totally eliminated. Therefore, most risk can only be reduced, by taking various prudent measures in the supply chain process.
What are the sources of risks faced by the global supply chain?
The global supply chain faces three types of risks on a daily basis. The three types are supply risks, demand risks, and operational risks. Supply risks are disruptions that impact inbound supply and result in a supply chain being unable to meet demand in terms of quality of parts, quantity, and finished goods. Demand risks are disruptions that impact outgoing supply because demand fluctuations are unexpected. Operational risks are disruptions that impact a supply chain in a way that prevents the supply chain from providing supply services or finished good within allowable time, cost, or quality. Transportation is one of the most significant operational risks to the global supply chain. There are numerous factors that go into global supply chain risks. The factors include environmental, geopolitical, economic, and technological. Some of these risk factors can be mitigated and some cannot. For example, natural disasters and extreme weather cannot be mitigated or affected. However, theft, illicit trade, and infrastructure failures can be prevented completely with the proper preparation.
2. How can companies mitigate these risks?
Companies can mitigate the risks faced by the global supply chain by implementing different operational concepts. Depending on the type of company and the product being produced and distributed the Six Sigma concept can drastically increase operations and mitigate risk. Some other types of companies can utilize the Quick Response concept. There are many different approaches to mitigating risk in the supply chain world, but these are two tried and true concepts that have a good track record.

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