Risk assessment analysis, and prioritisation
With increasing global uncertainties and evolving U.S. trade policies, businesses must proactively assess and strengthen their supply chains. Utilising the Supply Chain Diversification Toolkit, businesses can identify vulnerabilities and implement strategies to safeguard operations.
Key Considerations for Supply Chain Risk Assessment, Analysis, and Prioritisation:
1. Map the Scope
Define the scope of your supply chain mapping across all tiers of your key suppliers. Assess risks at each stage, from raw material procurement to final delivery. U.S. trade policy emphasises nearshoring and friendshoring to reduce dependence on high-risk regions, making it critical to understand your supplier network and explore alternative sourcing opportunities.
2. Conduct a Risk Assessment
Identify and assess potential risks, considering the likelihood and impact of disruptions. Factors such as trade restrictions, tariffs, geopolitical tensions, and regulatory changes should be included in the evaluation. The Supply Chain Diversification Toolkit provides frameworks to help businesses assess risks and identify strategic alternatives.
3. Analyse Risks
Evaluate the root causes and potential consequences of identified risks. Understanding systemic vulnerabilities enables businesses to prioritise threats that could most severely impact operations. U.S. trade initiatives emphasise reshoring and regional diversification as key strategies to minimise exposure to geopolitical risks.
4. Prioritise Risks
Rank risks based on their severity and potential impact. Prioritisation ensures that resources are allocated effectively to address critical vulnerabilities first. Given recent U.S. trade policy shifts, special attention should be given to risks related to overdependence on non-allied nations for essential goods.
5. Develop Risk Management Strategies
Implement risk mitigation strategies such as diversifying suppliers, leveraging domestic and allied-nation sourcing, and establishing contingency plans. The Supply Chain Diversification Toolkit offers actionable insights on supplier diversification, redundancy planning, and enhanced supplier collaboration to build resilience.
6. Monitor and Review Continuously
Regularly assess and adjust your risk management strategies to account for new challenges, policy changes, and evolving trade dynamics. Maintain a risk register, including "near miss" events, to refine mitigation efforts. U.S. initiatives supporting domestic manufacturing and supply chain resilience provide valuable opportunities for businesses to secure stable and reliable sourcing options.
Strengthen Your Supply Chain with the Right Tools
Leverage the Supply Chain Diversification Toolkit and Supply Chain Strategy Template for SMEs to enhance risk assessment, optimise supplier selection, and align with U.S. trade policies. These two resources are free for members of the alliance or can be included as part of applying for the GTPA’s Digital Passports Program and Supply Chain Award badge. By proactively managing risks and adopting diversification strategies, businesses can navigate uncertainties and build a more resilient supply chain in today’s dynamic trade environment.
Join the alliance: https://www.gtpalliance.com/join-the-alliance/
Sign up for a Passport and Award badge: https://shop.gtpalliance.com/products/promotional-packages-for-enhanced-supply-chain-resilience