The Formulation of Strategies to Mitigate Supply Risks

The integration of markets through globalization leads to the formation of global supply chains in which supply chain partners and operations disperse to wide geographical areas. Although global supply chains refer to the expansion of markets and the higher production efficiency, they embed higher number of and more serious risks than domestic/traditional supply chains have. For this reason, firms being part of global supply chains need to manage their supply chain risks more elaborately. They need to have systematic approach to identify all supply risks and should be able to prepare the priority list of these supply risks with appropriate tools and techniques. Next, it is imperative for these firms to determine the right strategy so that they are able to both prevent themselves from the destructive negative impacts of risky events and reduce the amount of expenditure made on the actions to mitigate their supply risks.