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RISK IDENTIFICATION AND ASSESSMENT

By the end of the session, learners should be able to;
a) Describe the concepts of Risk Identification and assessment
b) Discuss risk management cycle in supply chain
c) Explain risk identification and assessment
d) Determine tools for identification of supply chain risks
e) Assess various risks in supply chain.
f) Determine various risk frameworks (Supply chain risk model) in supply chain
g) Apply qualitative and quantitative approaches to risk assessment
h) Analyze risks mitigation strategies in supply chain
THE CONCEPTS OF RISK IDENTIFICATION AND ASSESSMENT
Risk identification is the process of identifying potential risks to an organization or project. It is
the first step in the risk management process, and it is essential for making informed decisions
about how to mitigate and manage risks.
Once risks have been identified, they need to be assessed to determine their likelihood and
impact. This is known as risk assessment.
Risk assessment is the process of evaluating the likelihood and impact of identified risks. This
information can then be used to prioritize risks and develop mitigation strategies.
There are a number of different methods for risk assessment, including:
 Qualitative assessment: This involves using subjective judgment to assess the likelihood
and impact of risks.
 Quantitative assessment: This involves using data and statistical analysis to assess the
likelihood and impact of risks.
Once risks have been identified and assessed, the next step is to develop and implement
mitigation strategies. This may involve taking steps to reduce the likelihood of risks occurring, or
to reduce the impact of risks if they do occur.
Risk identification and assessment are essential processes for any organization that wants to
effectively manage risk. By identifying and assessing risks early on, organizations can take steps
to mitigate and manage them, and reduce the likelihood of negative consequences.
Here are some examples of risk identification and assessment in different contexts:
 A company that is developing a new product may identify risks such as technical
difficulties, market acceptance, and regulatory compliance. The company would then
assess the likelihood and impact of each risk and develop mitigation strategies
 A construction company may identify risks such as bad weather, accidents, and delays in
obtaining permits. The company would then assess the likelihood and impact of each risk

BY ABUBAKARI MRISHO, CPSP (T), CPA (IP), 0717 58 14 04, [email protected]

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and develop mitigation strategies, such as creating a contingency plan for bad weather or
purchasing insurance to cover the cost of accidents.
Risk identification and assessment are essential for any organization that wants to protect itself
from potential threats and achieve its goals.
RISK MANAGEMENT CYCLE IN SUPPLY CHAIN
1. Identification of risks that can affect supply chain performance: The first step in the
risk management cycle is to identify all of the potential risks that could affect the supply
chain. This can be done by brainstorming with stakeholders, reviewing historical data,
and conducting industry research.
2. Analyzing supply chain risks: Once the risks have been identified, the next step is to
analyze them to determine their probability of occurrence and their impact on the supply
chain if they do occur. This can be done using a variety of risk assessment methods, such
as quantitative and qualitative analysis.

3. Prioritizing supply chain risks: Once the risks have been analyzed, they need to be
prioritized based on their probability of occurrence and their impact on the supply chain.
This will help to ensure that resources are allocated to managing the most important risks.
A common way to prioritize risks is to use a risk matrix. A risk matrix is a tool that helps
to visualize the risks facing a supply chain and to prioritize them accordingly. The risk
matrix typically assigns a score to each risk based on its probability of occurrence and its
impact on the supply chain. The risks with the highest scores are the ones that should be
prioritized.
4. Deciding or planning on how to manage or mitigate supply chain risks: Once the
risks have been prioritized, the next step is to develop plans to manage or mitigate them.
There are a variety of risk response techniques that can be used, such as:
 Transferring
 Treating
 Terminating
 Tolerating
 Sharing
 Exploiting
5. Monitoring and controlling supply chain risks: The risk management cycle is an
ongoing process. Risks need to be monitored and controlled regularly to ensure that the
plans to manage or mitigate them are effective. This may involve updating the risk
assessment, developing new risk response plans, and reviewing the effectiveness of
existing plans.

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It is also important to review the risks regularly to determine if the environment has
changed in order to make adjustments. For example, if a new supplier enters the market,
the company may need to reassess its supplier risk.
By following the risk management cycle, supply chain managers can identify, assess,
prioritize, manage, and mitigate risks to their supply chain. This can help to ensure that
the supply chain performs effectively and efficiently, even in the face of unexpected
challenges.
TOOLS FOR IDENTIFICATION OF SUPPLY CHAIN RISKS
Tools to identify supply chain risks include:
 Documentary review: This involves reviewing existing documentation, such as
contracts, supplier evaluations, and financial statements. This can help to identify
potential risks, such as supplier financial instability or non-compliance with regulations.
 Brainstorming: This is a creative process of generating ideas to identify potential risks.
It can be done individually or in a group.
 Delphi technique: This is a structured process of gathering and refining expert opinions
to identify potential risks. It involves sending out a series of questionnaires to experts,
with each round of feedback used to refine the list of risks.
 Interviewing: This involves interviewing people with knowledge of the supply chain,
such as suppliers, customers, and internal staff. This can be used to gather information on
potential risks and to assess the likelihood and impact of those risks.
 Root cause analysis: This is a process of identifying the underlying causes of a problem.
It can be used to identify supply chain risks by examining the root causes of past
disruptions or problems.
 Checklist analysis: This involves using a checklist of common supply chain risks to
identify potential risks in a company's specific supply chain.
 Assumption analysis: This involves identifying and challenging the assumptions that are
made about the supply chain. This can help to identify potential risks that may not have
been considered otherwise.
 SWOT analysis: This is a framework for identifying a company's strengths, weaknesses,
opportunities, and threats. It can be used to identify supply chain risks by considering the
external threats and internal weaknesses that a company faces.
 PESTEL analysis: This is a framework for identifying the political, economic, social,
technological, environmental, and legal factors that can impact a company. It can be used
to identify supply chain risks by considering the external factors that can disrupt the
supply chain

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 Expert judgment: This involves using the knowledge and experience of experts to
identify potential risks. Experts can be internal staff, consultants, or academics.
 Historical data analysis: This involves analyzing historical data to identify trends and
patterns that may indicate potential risks. For example, a company could analyze its
historical data on supplier performance to identify suppliers that are at risk of failing to
meet delivery deadlines or quality standards.
 Site visits: Conducting site visits can help to identify hazards and risks that may not be
apparent from documentation alone.
These tools can be used individually or in combination to identify a comprehensive range of
supply chain risks. The best approach will vary depending on the specific company and its
supply chain.
VARIOUS RISKS IN SUPPLY CHAIN
Various risks in supply chain
1. Demand risks
 Demand volatility: Sudden and unpredictable changes in demand for products or
services.
 Forecasting errors: Inaccurate estimates of future demand, which can lead to
overstocking or under stocking.
 Changing tastes and preferences of customers: Customers' preferences for
products and services can change over time, which can impact demand.
2. Supply risks
 Supplier reliability: The risk that suppliers will not be able to deliver the goods or
services on time and in the agreed-upon quantity and quality.
 Reliance on a particular supplier: Overreliance on a single supplier can increase the
risk of supply disruption if that supplier experiences problems.
 Scarcity or shortage of supplies on the market: Shortages of raw materials,
components, or other supplies can disrupt production and lead to delays in deliveries
to customers.
 Few numbers of suppliers on the market: Limited supply options can reduce
flexibility and make it more difficult to mitigate supply risks.
3. Operational risks
 Production disruptions: Unexpected events such as equipment failures, power
outages, or natural disasters can disrupt production and delay deliveries.

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 Transportation delays: Goods and materials can be delayed in transit due to factors
such as bad weather, traffic congestion, or customs clearance issues.
 Poor materials handling: Improper handling of materials can damage them and lead
to product quality problems.
4. Quality risks
 Entity's producing defective goods: Internal quality control failures can lead to the
production of defective goods.
 Suppliers failure to meet entity's quality standards: Suppliers may not be able to
meet the entity's quality standards, which can lead to the delivery of defective goods
5. Financial risks
 Fluctuation of exchange rates: Changes in exchange rates can impact the cost of
goods and materials sourced from overseas suppliers.
 Customers delaying to make payments: Late payments from customers can disrupt
cash flow and impact the ability to pay suppliers.
6. Market risks
 Fluctuations in market conditions: Changes in market conditions such as economic
downturns or new competitor entrants can reduce demand for products and services.
 Change of taste and preference of customers: Customers' preferences for products
and services can change over time, which can impact demand.
 New competitors: New competitors can enter the market and reduce market share for
existing businesses.
7. Geopolitical and trade risks
 Political instability: Political instability in countries where suppliers are located can
lead to supply disruptions.
 Trade barriers and tariffs: Trade barriers such as tariffs and quotas can increase the
cost of goods and materials sourced from overseas suppliers.
 Changes in trade agreements among countries: Changes in trade agreements can
impact the cost of goods and materials sourced from overseas suppliers.
8. Environment and natural risks
 Climate change: Climate change can lead to extreme weather events such as floods,
droughts, and wildfires, which can disrupt production and transportation.
 Earthquakes: Earthquakes can damage infrastructure and disrupt production and
transportation.

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 Floods: Floods can damage infrastructure and disrupt production and transportation.
 Wildfires: Wildfires can damage infrastructure and disrupt production and
transportation
9. Technological risks
 Constantly rapid changes in technology: Rapid technological changes can make
existing products and services obsolete and require businesses to invest in new
technologies.
 Risks of hackers to access confidential information of organization in IT
systems: Hackers can gain access to confidential information in IT systems, which
can lead to data breaches and other problems.
10. Regulatory and compliance risks
 Changes in government regulations: Changes in government regulations can
impact the cost and complexity of doing business.
 Failure to comply with government regulations: Failure to comply with
government regulations can lead to fines, penalties, and other legal problems.
11. Labour and human resource risks
 Labour shortage: A shortage of qualified workers can make it difficult to find and
retain employees.
 Labour strikes: Labour strikes can disrupt production and lead to delivery delays.
 Labour disputes: Labour disputes can lead to decreased productivity and morale.
 Unethical practices of labour: Unethical practices such as frauds, corruption etc.
can affect supply chains performance.
12. Intellectual property risks
 Infringement of intellectual property rights: Businesses can be sued for infringing
on the intellectual property rights of others, such as trademarks, copyrights, and
patents.
 Theft of intellectual property: Intellectual property can be stolen by employees,
competitors, or other third parties
VARIOUS RISK FRAMEWORKS (SUPPLY CHAIN RISK MODELS) IN SUPPLY
CHAIN
Supply Chain management Risk Models and Frameworks
1. Multi-Tier Supply Chain Risk Framework: This framework recognizes the
interconnectedness of modern supply chains and the cascading impact that disruptions at

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one tier can have on other tiers. It considers risks at the supplier, sub-supplier, and
customer levels, as well as the risks associated with transportation, logistics, and other
supporting functions.
2. Triple A Supply Chain Model: This model emphasizes the importance of adaptability,
alignment, and agility in managing supply chain risks. Adaptability refers to the ability of
the supply chain to quickly adjust to changes in demand, supply, or other factors.
Alignment refers to the need for all supply chain partners to be working towards the same
goals and objectives. Agility refers to the ability of the supply chain to respond quickly to
disruptions and unexpected events.
3. Bullwhip Effect Model: This model explains how small changes in demand at the
consumer level can be amplified as they move up the supply chain, leading to larger and
more disruptive fluctuations in inventory at higher tiers. The bullwhip effect can be
caused by a variety of factors, such as poor communication between supply chain
partners, inaccurate forecasting, and excessive safety stock levels.
4. ISO 31000 Risk Management Standard: This international standard provides a
framework for managing risks of all types, including supply chain risks. The ISO 31000
process consists of five steps:
 Identify the risks: This involves identifying all of the potential risks that could
disrupt the supply chain.
 Assess the risks: This involves evaluating the likelihood and impact of each risk.
 Treat the risks: This involves developing and implementing strategies to
mitigate, transfer, or accept the risks.
 Monitor and review the risks: This involves regularly monitoring the risks and
updating the risk management plan as needed.
 Communicate and consult: This involves communicating and consulting with
stakeholders throughout the risk management process.
5. ISO 22301 Business Continuity Management Standard: This international standard
provides a framework for developing and implementing a business continuity plan. A
business continuity plan is a document that outlines how the organization will respond to
a disruption in its operations. The ISO 22301 standard can be used to develop a business
continuity plan that addresses supply chain risks.

6. Reliance 360 Model: The Reliance 360 model is a proprietary supply chain risk
management framework developed by the consulting firm KPMG. The model is based on
four key elements:
 Supply chain mapping: This involves mapping out the entire supply chain,
including all suppliers, sub-suppliers, and customers.

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 Risk identification and assessment: This involves identifying and assessing the
risks associated with each supplier, sub-supplier, and customer.
 Risk mitigation: This involves developing and implementing strategies to mitigate
the risks.
 Risk monitoring and review: This involves regularly monitoring the risks and
updating the risk management plan as needed
7. Supply Chain Risk Management (SCRM) Framework: The SCRM framework is a
comprehensive framework for managing supply chain risks. The framework consists of
five steps:
 Identify the risks: This involves identifying all of the potential risks that could
disrupt the supply chain.
 Assess the risks: This involves evaluating the likelihood and impact of each risk.
 Develop risk mitigation plans: This involves developing and implementing
strategies to mitigate the risks.
 Implement the risk mitigation plans: This involves putting the risk mitigation
plans into place.
 Monitor and review the risk mitigation plans: This involves regularly monitoring
the risk mitigation plans and making adjustments as needed.
8. Karljic Model
Understanding the Kraljic Portfolio Purchasing Model
The Kraljic Portfolio Purchasing Model was created by Peter Kraljic and it first appeared
in the1983. Despite its age, it's a popular and useful model used in companies worldwide.

Its purpose is to help purchasers maximize supply security and reduce costs, by making
the most of their purchasing power. In doing so, procurement moves from being a
transactional activity to a strategic activity – because, as Kraljic said, "purchasing must
become supply management."

Kraljic used two factors such as supply risks and importance of purchase and profit
impact to classify items into four groups as follows:

1. Strategic items
The items are characterized by high supply risks and high profit impact example
assemblies, gear boxes and engines. Together with leverage products can account
to 80% of turnover profit, small change in price will have immediately significant
impact on costs. The items are characterized with high risks due to high

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dependence to supplier and supplier has higher power than buyer. The
procurement strategies to use are:-

o Backward integration
o Global sourcing
o Partnership with supplier
o Contingency planning
o Make decision
o Supplier development i.e. developing capacity of suppliers.

2. Leverage items
The items are characterized by low supply risks and high profit impact example steel
plate. The procurement strategies to use are:-
o Competitive bidding
o Use of substitute products

3. Bottleneck items.
The items are characterized by high supply risks and low profit impact example
nature flavors, vitamins. The procurement strategies to use are:-
o Over ordering (forward buying) when the items available
o Control supply base.

4. Non-critical items (low profit impact, low supply risk).

The items are characterized by low supply risks and low profit impact example office
supplies like stationeries. The procurement strategies to use are: -
o Aggregating requirements.
o Using framework contracts.
o Standardization.

Supply risks are measured against the following criteria: -

i. Availability of products
ii. Number of suppliers
iii. Competitive demand
iv. Make or buy opportunities
v. Storage risks
vi. Substitution opportunities

Purchasing importance and profit impact (expenditure) are measured against

the following criteria: -

i. Cost of materials.
ii. Percentage of total costs.

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iii. Impact on product quality

The kraljic portfolio matrix (supply positioning model)

9. BCG model
One of the most popular portfolio approaches is Boston Consulting Group (BCG) matrix.
This approach to strategy analyses business opportunities according to market growth
rate and market share, based on these criteria businesses can be categorized as:-
 Stars businesses: are characterized by high market share and high market growth.
 Cash cows: are characterized by high market share and low market growth.
 Dogs: are characterized by low market share and low market growth.
 Question marks: are characterized by low market share and high market growth.

-The BCG Matrix can be used to decide what strategy (ies) to adopt at all three
organizational levels i.e. corporate, business and functional levels.

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Corporate strategies within the BCG matrix

High A) Question marks B) Stars
-Poor competitive position in a growing market -Dominant position in a growing market
Recommended strategy Recommended strategy
 Growth for most promising with  Provide additional resources and
investment of resources. develop the business in accordance
 Retrenchment or defensive strategies. with market projections.
C) Dogs D) Cash cows
-Poor competitive position in a low -Dominant position in low growth
growth environment. environment.
Recommended strategy
Recommended strategy
Market  Retrenchment or defensive strategies i.e.
 Stability or moderate growth,
reduce sales or wind-up the business to
Growth maintain benefits of strong cash flow
reduce further loss of resources.
while minimizing investment.
Rate

Low

Low Market share of product or services High

10. COSO ERM (Committee of Sponsoring Organization of the Tread way Commission
Enterprise Risk Management) Framework: The COSO ERM framework is a
comprehensive framework for managing enterprise-wide risks, including supply chain
risks. The framework consists of five components:

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 Internal environment: This component includes the organization's culture, values,

mission, and vision, as well as its risk appetite and tolerance.
 Objective setting: This component involves identifying and setting strategic and
operational objectives.
 Event identification, risk assessment, and risk response: This component involves
identifying, assessing, and responding to risks.
 Information and communication: This component involves capturing and
communicating relevant information to support the risk management process.
 Monitoring and improvement: This component involves monitoring the
effectiveness of the risk management process and making improvements as
needed.
11. The Casualty Actuarial Society (CAS) ERM Framework: This framework is designed
for the insurance industry, but it can be adapted for use in other industries as well. The
CAS ERM Framework focuses on the identification, assessment, and management of
strategic risks.

12. The ISO/IEC 27001 Information Security Management System (ISMS) Standard:
This standard provides a framework for managing information security risks. The
ISO/IEC 27001 ISMS Standard is widely used in organizations of all sizes and industries.

13. The National Institute of Standards and Technology (NIST) Cybersecurity

Framework (CSF): The NIST CSF is a voluntary framework that provides a common
language and set of standards for managing cybersecurity risks. The NIST CSF is used by
organizations of all sizes and industries.

14. The Operational Risk Management (ORM) Framework: The ORM Framework is a
quantitative framework for managing operational risks. The ORM Framework is widely
used in the financial services industry, but it can be adapted for use in other industries as
well.

15. The Risk Management Maturity Model (RMM): The RMM is a model for assessing
the maturity of an organization's risk management capabilities. The RMM can be used by
organizations to identify areas where their risk management practices can be improved.
Which supply chain risk model or framework is most appropriate for a particular
organization will depend on a variety of factors, such as the size and complexity of the
supply chain, the industry in which the organization operates, and the organization's risk
appetite and tolerance.

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APPLY QUALITATIVE AND QUANTITATIVE APPROACHES TO RISK

ASSESSMENT
Quantitative analysis involves using data to assess the probability and impact of risks. For
example, a company might use historical data to determine the probability of a supplier
experiencing a financial crisis.
The following are qualitative approaches of risks assessment;
1. Delphi method: This technique involves gathering expert opinions on risks, typically
anonymously and through multiple rounds of surveys. The goal is to reach a consensus
on the most significant risks and their likelihood and impact.
2. SWOT analysis: This technique is often used to identify strengths, weaknesses,
opportunities, and threats to an organization. It can also be used to identify and assess
risks.
3. Root cause analysis: This technique involves investigating the underlying causes of a
risk event to identify ways to prevent it from happening again.
4. What-if analysis: This technique involves brainstorming a list of "what-if" questions to
identify potential risks. For example, you might ask yourself "what if our website goes
down?" or "what if we lose a key employee?
5. Lessons learned analysis: This technique involves reviewing past risk events to identify
what went wrong and what could be done better to prevent similar events in the future.
6. Benchmarking: This technique involves comparing your risk management practices to
those of other organizations in your industry or sector. This can help you to identify areas
where you can improve.
7. Risk appetite assessment: This technique involves determining how much risk your
organization is willing to accept. This helps to inform your risk management decisions.

Qualitative analysis involves using expert judgment to assess risks that cannot be easily
quantified, such as the risk of a new competitor entering the market. Quantitative risk analysis is
a numerical approach to risk assessment that uses data and calculations to estimate the
probability and impact of risks.
The following are quantantive approaches of risks assessment;
1. Expected monetary value (EMV): EMV is a simple but effective method for calculating
the overall financial impact of a risk. It involves multiplying the probability of each risk
by its potential financial impact and then adding up the results.
2. Monte Carlo simulation: Monte Carlo simulation is a more complex method that can be
used to model the uncertainty associated with risks. It involves creating a large number of

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random scenarios and then calculating the impact of each scenario on the overall project
or system.
3. Sensitivity analysis: Sensitivity analysis is used to assess how changes in the key
assumptions underlying a quantitative risk analysis affect the results. This can be useful
for identifying the most important factors to consider when making decisions about risk
management.
4. Scenario Analysis: Scenario analysis is a technique that is used to explore the potential
impacts of different future events. It is used to identify and assess the risks associated
with different scenarios, and to develop contingency plans to mitigate the risks.
5. Risk Probability Matrix: A risk probability matrix is a tool that is used to assess the
likelihood and impact of each risk identified in a risk register. The matrix typically has
four quadrants: high likelihood/high impact, low likelihood/high impact, high
likelihood/low impact, and low likelihood/low impact.
6. Quantitative Risk Assessment (QRA): QRA is a systematic approach to assessing the
risks associated with a project or activity. It uses quantitative data and methods to
estimate the probability and impact of each risk, and to develop mitigation strategies to
reduce the risk.
7. Decision Tree Analysis: Decision tree analysis is a visual technique that maps out the
possible consequences of different decisions. It can be used to identify and assess the
risks associated with different options, and to make informed decisions about how to
proceed.
ANALYZE RISKS MITIGATION STRATEGIES IN SUPPLY CHAIN
The following are some risks mitigation strategies in supply chain
1. Spot transaction hedging techniques to overcome fluctuations of exchange rate: Spot
transaction hedging is a type of hedging that involves buying or selling a currency on the
spot market to protect against future fluctuations in the exchange rate. This can be a
useful strategy for organizations that import or export goods and services, as it can help
to minimize the impact of currency fluctuations on their bottom line.
2. Forward transaction hedging strategy to overcome foreign exchange rate risks:
Forward transaction hedging is a type of hedging that involves entering into a forward
contract to buy or sell a currency at a predetermined price on a future date. This can be a
more effective way to hedge against foreign exchange rate risks than spot transaction
hedging, as it locks in the exchange rate for a longer period of time.
3. Value analysis in order to respond quickly to the needs of customers: Value analysis
is a process of evaluating the cost, quality, and performance of a product or service in
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order to identify ways to improve its value. This can be a useful strategy for organizations
that want to be able to respond quickly to the needs of their customers, as it can help
them to identify ways to reduce costs or improve quality without sacrificing value.
4. Developing alternative sources of supplies in order to overcome the risks of supplies
availability: Developing alternative sources of supplies can help organizations to
mitigate the risks of supply disruptions. This can be done by identifying and qualifying
new suppliers, or by building relationships with suppliers in multiple countries.
5. Using insurance in order to transfer several procurement risks to insurance
company: Insurance can be used to transfer a variety of procurement risks to an
insurance company. This can include risks such as product liability, property damage,
and business interruption.

6. Dual sourcing is a strategy to mitigate supply chain risks by using two or more suppliers
for the same product or service. This can help to reduce the impact of disruption from a
single supplier, such as bankruptcy, natural disaster, or labor unrest.
7. Risk sharing contracts are contracts between a company and its suppliers that share the
risk of disruptions. For example, a contract might specify that the supplier will bear the
cost of any delays caused by their own negligence, but the company will bear the cost of
delays caused by factors beyond the supplier's control.
8. Lean inventory management, such as just-in-time (JIT) inventory, involves keeping
minimal inventory on hand. This can help to reduce costs, but it also makes the supply
chain more vulnerable to disruptions. Companies that use JIT inventory management
need to have strong relationships with their suppliers and be able to quickly respond to
changes in demand.
9. Applying agility concepts to the supply chain involves being able to quickly adapt to
changes in the environment. This can be done by using technology to improve visibility
and responsiveness, and by having contingency plans in place to deal with disruptions.
10. Early supplier involvement: Involving suppliers early in the product development
process can help to identify and mitigate potential supply chain risks.
11. Early buyer involvement: Involving procurement specialists early in the product
development process can help to ensure that the product is designed with the supply chain
in mind.

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12. Application of both make and buy decisions: Businesses need to decide whether to
make or buy certain products or services. This decision should be made based on a
number of factors, including the risk of disruption. We can reduce supply chain risks by
using all two options.
13. Applying supplier development strategies: Businesses can work with their suppliers to
improve their performance and reduce the risk of disruption. This can be done through a
variety of means, such as training, technical assistance, and financial support.
14. Conducting supplier mapping practice: Supplier mapping is the process of identifying
and understanding all of the suppliers in a business's supply chain. This information can
be used to assess the risk of disruption and to develop mitigation strategies.
15. Control entity's supply base: Businesses should regularly review their supplier base and
remove unqualified suppliers. They should also add qualified suppliers to their base to
reduce the risk of disruption.
16. Apply supply base rationalization practice: Supply base rationalization is the process
of reducing the number of suppliers in a business's supply chain. This can be done by
consolidating suppliers or by eliminating unnecessary suppliers. This can help to reduce
costs and improve efficiency, but it can also increase the risk of disruption.

17. Investing in technology to improve procurement and supply chain efficiency and
visibility.
18. Building strong relationships with suppliers.
19. Developing a contingency plans for unexpected events example maintaining buffer
stock, developing contingency budget. Etc.

It is important to note that no single mitigation strategy is effective against all supply chain risks.
The best approach is to use a combination of strategies to reduce the overall risk to the supply
chain.

BY ABUBAKARI MRISHO, CPSP (T), CPA (IP), 0717 58 14 04, [email protected]