Every supply chain activity involves risk. Six
Supply chain activities are subject to risk. Globalized supply chains have a higher chance of being exposed due to the complexity of their supply chains. There are many potential sources of and possible causes for risk within global supply chains.
1) Natural catastrophes: Floods and earthquakes are a major disruption to operations. They can also disrupt transportation routes or cause damage to infrastructure, causing delays that could delay goods’ delivery.
2) Political instability. Changes in policies or regulations can have a significant impact on international trade, leading to currency fluctuations and sudden tariffs being imposed upon certain services.
3) Inadequate communication: Poor information exchange between parties can cause significant delays and problems when it comes to coordination across countries.
4) Social issues. Rising labor costs, or a shortage of skilled workers may make it difficult for suppliers to meet customer demand. Deliveries might be delayed which could cause major disruptions.
6) Supply & demand shifts: Rapid changes amount demand for certain products/services could catch companies by surprise leaving them unable properly adjust their strategies order cope with situation thus resulting financial losses overall.