Supply Chain Risk Management

Supply Chain Management and Procurement October 25, 2025
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Introduction

The modern supply chain is increasingly exposed to high-impact, low-probability events, from natural disasters and geopolitical conflict to cyber-attacks and labor shortages. This course provides a robust, systematic approach to **Supply Chain Risk Management (SCRM)**. Participants will master methodologies for identifying, assessing, mitigating, and monitoring risks across the entire end-to-end chain. The program emphasizes building a resilient, agile, and robust supply network capable of maintaining business continuity and rapidly recovering from major disruptions, ensuring stability and competitive advantage.

Objectives

Upon completion of this course, participants will be able to:

  • Apply a structured framework for **identifying and classifying** supply chain risks (e.g., source, demand, environmental).
  • Utilize tools such as **Risk Heat Maps** and FMEA to assess the probability and impact of disruptions.
  • Develop and implement a comprehensive **Supply Chain Business Continuity Plan (BCP)**.
  • Design mitigation strategies, including dual sourcing, inventory buffering, and regional diversification.
  • Master the use of **Scenario Planning** and simulation for testing supply chain resilience.
  • Integrate SCRM into supplier selection, contract negotiation, and overall governance.
  • Manage digital and cybersecurity risks related to supply chain information systems.
  • Implement a continuous risk monitoring and early warning system for critical suppliers and regions.

Target Audience

  • Supply Chain and Logistics Directors/Managers
  • Risk Management and Business Continuity Planners
  • Procurement and Sourcing Specialists (especially for critical goods)
  • Operations and Manufacturing Leaders
  • Internal Audit and Compliance Officers
  • Senior Analysts focused on Supply Chain Resilience

Methodology

  • Crisis management simulation: working in teams to manage the fallout of a major supply chain disruption (e.g., a factory fire).
  • Group activity: mapping a complex product's supply chain and building a risk heat map.
  • Scenario planning workshop: testing BCPs against various disruption scenarios (e.g., port closure).
  • Individual exercise: conducting a Failure Mode and Effects Analysis (FMEA) on a logistics process.
  • Discussions on the financial justification for investing in risk mitigation (insurance vs. inventory).

Personal Impact

  • Expertise in a highly strategic and visible area of modern business leadership.
  • Ability to conduct rigorous risk assessments and build defensible BCPs.
  • Enhanced decision-making under pressure and crisis management skills.
  • Increased internal credibility as a contributor to business continuity.
  • Skills to effectively integrate risk clauses into contracts and supplier selection.

Organizational Impact

  • Minimized impact of disruptions, ensuring business continuity and revenue stability.
  • Reduced costs associated with unplanned delays, expediting, and recovery.
  • Improved resilience and agility of the supply chain network design.
  • Better allocation of capital by prioritizing high-impact risk mitigation investments.
  • Enhanced brand reputation by reliably meeting customer commitments during disruptions.

Course Outline

Unit 1: Fundamentals of Supply Chain Risk

The SCRM Framework
  • Defining supply chain risk and its categorization (operational, financial, environmental)
  • The cost of disruption: calculating direct and indirect financial impact
  • Integrating SCRM into the organization's Enterprise Risk Management (ERM) framework
Risk Identification and Mapping
  • Techniques for mapping the **end-to-end supply chain** to reveal dependencies
  • Identifying hidden risks in the **Tier-N** supplier network (sub-suppliers)

Unit 2: Risk Assessment and Prioritization

Assessment Tools
  • Developing and using **Risk Heat Maps** (Likelihood vs. Impact matrix)
  • Applying Failure Mode and Effects Analysis (FMEA) to critical processes
  • Quantifying financial exposure using tools like Value at Risk (VaR)
Prioritization
  • Focusing effort on high-impact, high-probability risks (the critical few)
  • Analyzing single points of failure (SPoF) in the network

Unit 3: Risk Mitigation Strategies

Building Resilience
  • Implementing inventory strategies: strategic safety stock, decoupling points
  • Designing network redundancy: multi-sourcing, regional diversification (reshoring, nearshoring)
  • Increasing organizational agility (speed of response and reconfiguration)
Contractual Mitigation
  • Integrating risk-sharing and penalty clauses into supplier contracts
  • Ensuring adequate supplier insurance and force majeure coverage

Unit 4: Business Continuity and Crisis Response

BCP Development
  • Developing the **Supply Chain Business Continuity Plan (BCP)**: clear roles, communication protocols
  • Establishing alternative production, logistics, and IT recovery sites
Crisis Management
  • Defining the immediate response protocol for major disruptions (e.g., natural disaster)
  • Mastering communication strategies during a crisis (internal and external)

Unit 5: Monitoring, Digital Risk, and Governance

Risk Monitoring
  • Implementing early warning systems and real-time risk intelligence feeds (e.g., geopolitical, weather)
  • Using predictive analytics for anticipating demand or capacity risks
Digital and Cyber Risk
  • Identifying cyber vulnerabilities in SCM IT systems (ERP, WMS, supplier portals)
  • Managing data security and compliance across the supply chain ecosystem

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