Supply Chain Risk Management Report

Over the last few years, the growth of the supply network has revealed a good impact by connecting people all over the world. After the economic crisis in 2008, many corporation executives gained interest in Supply Chain Risk Management (SCRM) to explore the causes and effects of risks to economic supply chains. There are up to three themes which were shared in the development of SCRM as a discipline in the year 2009-2013. SCRM has become broad in its objectives, and it has become more challenging in managing risk while maximizing productivity (Shahbaz et al., 2017).

The first theme originating from the 2010 report from Aberdeen Group is the analysis of reasons behind pursuing an aggressive risk management agenda. Various reasons behind the plan were put in place to secure the enterprise and its brand, safeguard a firm against an unstable global economic environment, improve the administration, complying with new and changing regulations, and maintaining or improving shareholder value. The role of Chief Procurement Officers (CPO) is to clearly define metrics for supply performance and risk and use different sources of information to monitor and assess supply risk. Transparency, unity, and cooperation between the organization’s officials, suppliers, and consumers can lead expansion of businesses effectively.

The development of transparency in the communication of risk information, management policies, and accountability in firm leadership can significantly help in ensuring success in the firms. In addition, the PRTM 2010 report postulated that 75% of respondents believed that the demand and supply volatility will finally become a barrier to capturing profits in the economic return and 80% expects complication in their procurement to rise rapidly because of growth in product proliferation. Most companies are inadequately prepared to manage the challenge and therefore, lack of proper implementation of risk management can affect the corporate’s performance adversely.

In 2011, the emergence of the “new normal” stated by Pearson in it has yielded positive results, such as employment of skilled personnel, large mass production of firms in a short time, and longer operation lead times. According to Ross (2020) it reveals that natural disasters such as COVID-19 disruptions made many firms to find alternative supply to deal with production delays. The advantages of implementing supply chain risk management effectively in business environments have led to emergence of some principles in its growth as a discipline. Identifying the unknown risks through probability to develop emergency plans, impose threat control practices across all business functions to ensure commitment, and emphasizing operational flexibility can be used in controlling disruptions in SCRM environments.

Thirdly, the 2013 theme reveals that there is a need for organizations to shift from reactive to proactive risk management. Reactive risk control is a way of reducing the damage of potential threats and speed up organization’s recovery from them while proactive risk management identifies threats and aims at preventing them from rising again and affect the firm’s business operations negatively. For instance, minimizing the exposure of a company’s delicate information is a proactive strategy of preventing a corporation from cyber-attacks. Unplanned IT and telecommunication increases the level of logistics failures and upsets which leads to brand reputation. Corporations should consider the application of response plans to identify, assess, mitigate, and govern risks scenarios.

The imposition of four supply chain pillars; supply, process, demand, and environment in SCRM has maintained success in organizations production. Supply chain has become an integral part of universal economics due to globalization and rapid change in innovation hence increasing the value of supply management (Kamalahmadi & Parast, 2016). The four pillars of SCRM have their own different set of program issues, tools, techniques, and processes which operate at a certain capacity in the supply chain. For over ten decades, procurement officers have been dealing with supplier uncertainty and risks without success. To manage supply risks, the well-capitalized organizations have offered education and incentives to the executives.

In conclusion, most supply chain executives became interested in the SCRM after the financial crisis of 2008. The negative results from supply chain risk control may be severe and thus, a timely response plan to boost productivity is crucial. Also, most enterprises are inadequately prepared from their organizational and IT perspectives to operate in an environment occupied with an increment of hesitancy and volatility. Many enterprises recognize the threat of procurement insecurity and realize that operating under the new normal can be challenging. The use of the four pillars of supply management can improve productivity, hence creating job opportunities for people. Most production companies require skilled personnel who can work competently to maximize profits while minimizing losses.


Kamalahmadi, M., & Parast, M. M. (2016). A review of the literature on the principles of enterprise and supply chain resilience: Major findings and directions for future research. International Journal of Production Economics, 171, 116-133. Web.

Ross, K. (2020). Start preparing for when the new normal becomes the next normal. Supplychaindive. Web.

Shahbaz, M. S., RM, R. Z., Bin, M. F., & Rehman, F. (2017). What is supply chain risk management? A review. Advanced Science Letters, 23(9), 9233-9238.

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