Supply Risk Management - Important Processes
What is Supply Risk Management?
Anytime a purchase order is placed or contract awarded there will be a degree of risk to the purchaser. Risk management is the process of identifying potential negative events, assessing the likelihood of their occurrence, heading off these events before they occur or reducing the probability they will occur and making contingency plans to mitigate the consequences if they do occur. Though risk can emanate from many places at the selection stage the focus is on two major risks: financial and operational.
With comprehensive end-to-end supply chain risk management strategies, companies can ensure cost reduction, efficient operation, and superior customer satisfaction while managing internal and external risk factors.
Another definition explains SCRM meaning as the process that deals with the strategy adopted by organizations to manage their flow of goods. Supply chain risk management (SCRM) includes the processes involved in changing raw materials into final products or services meant for customers. Other activities under the ambit of supply chain risk management are quality control, safety measures, reputation management, and business continuation.
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