Since the inception of the technological advancing era many nations have experienced rising uncertainties as a result of rising in temperatures, pandemics, chaotic law and order situation and increasing amount of economic turmoils. These uncertainties are acting as a gigantic rock for the supply chain hence disturbing its functioning. We are going to give some suggestions on how can we incorporate a proper set of rules tackle risks associated with supply chain. Proactive supply chain security solutions are accessible only if we use the relevant useful tools to over come the risks associated with supply chains. Before going into further details let us have a quick look at how uncertainty disturbs the supply chains and the risks associated with the uncertainties. Uncertainties cannot be reduced by venturing to gain more information about the occurrence in question and their impacts.
Risks associated with supply chain
The sole purpose of supply chain in the economy is to provide with the customer the best quality product at the lowest possible prices. Therefore supply chains are exposed to a whole new set of factors which can create mayhem and disturbance. Scenarios such as political disorder, bad law and order situation in the country are creating external risks in the supply chain. Hence, it is mandatory to identify different type of risks, measuring the likelihood of each of the major upsetting taking place. In order to reduce these uncertainties it is necessary to identify strategies to reduce risks. Supply chain risk assessment program motivates a firm to develop contingency plans which can be used to meet certain legal requirements.
Since the beginning of the current time period, companies are increasingly recognising the importance of risk management programs and are using different methods, fluctuating from formal quantitative models to informal qualitative programs to access supply chain risks. There comes another approach when measuring the supply chain risks. The proactive approach strategy identifies the potential risks at the supply chain design stage. Their likelihood and impact are evaluated and they are ranked in terms of importance. Identifying the risks and avoiding them is the main idea we need to focus on. If a risk never transpires, it becomes very difficult justify the time spent on risk estimation, juncture plans and risk management. A proactive risk management includes the probability of risk occurring, finding risk event drivers, identifying the relevant risks, identifying the probability of the impact and finding the impact drivers. One of the main enablers for a proactive risk management strategy is the presence of a culture and attitudes that provides assets and boost employees to develop risk eventuality plans.
CONCLUSION
To minimise the supply chain risks it has become mandatory to use a proactive strategy. Being proactive in the risk management means gathering an efficient predictive process for analysing and gathering data. Proving benchmark for the firm to include strategic objectives in attaining proactive supply chain security solutions and to measure the performance of their plan against the possible events. Data mining can be used as a predictive analysis tool for risk with high frequency and low severity. It has become mandatory to develop and use proactive strategies for managing supply chain risks. This methodology is going to be the need in the near future.