These two dramatically different outcomes from one event demonstrate the importance of proactively managing supply-chain risk.
Before companies can devise effective means of reducing supply-chain risks, managers must first understand the universe of risk categories as well as the events and conditions that drive them.
Unfortunately, there is no silver-bullet strategy for protecting organizational supply chains. Then, armed with clear, specific knowledge about these crucial risks, companies can proceed to select and tailor mitigation strategies likely to be most effective.

Basel Committee on Banking Supervision, “Sound Practices for the Management and Supervision of Operational Risk” (Basel, Switzerland: Basel Committee Publications, Feb. Thanks to its multiple-supplier strategy and responsiveness, Nokia’s production suffered little during the crisis. Broadly categorized, potential supply-chain risks include delays, disruptions, forecast inaccuracies, systems breakdowns, intellectual property breaches, procurement failures, inventory problems and capacity issues. Jansson, “Ericsson’s Proactive Supply Chain Risk Management Approach After a Serious Sub-Supplier Accident,” International Journal of Physical Distribution & Logistics Management 34, no.

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