Supply Chain Sarbanes Oxley Supply Chain SarBox Supply Chain SOX Supply Chain Corporate Governance Supply Chain Integrity

Risks can come from anywhere at any time. As part of good supply chain governance, risks which can interrupt your supply chain operations - internal and external - must be identified.

Supply chain risks include everything from harsh seasonal weather (floods, snow storms, hurricanes, etc.) to fraud to unreliable suppliers. Some supply chain risks are internal, some are external. Some you'll have more control over than others.

Once risks are identified, they can be classified by several characteristics. It's very important to understand key risk characteristics in order to know how to effectively deal with them.

*RISK CHARACTERISTIC*	*CHARACTERISTIC ATTRIBUTES*
SOURCE	Where does the risk come from? Is it internal or external?
METRIC	What are the risk's "red-yellow-green" levels?
MEASURE	What is a risk's impact to my supply chain?
FREQUENCY	What is the likelihood of the risk occurring?
PRIORITIZE	How important is this risk to my supply chain?

Once risk characteristics are identified, the risk can be managed. Often, it is helpful to create a risk map which visually shows the consequences versus likelihood of a risk in comparison to other risks. This is an effective way of grouping together risks by characteristics, and enables risks of similar characteristics to be addressed together.

The failure to identify risks is itself a risk!

If you have inhibitors in your company such as fraud and politics that blind you to identifying risks, you need to work to remove these inhibitors first. This is the first step in good supply chain governance and allows you to begin building integrity into your internal and external supply chains.