What is supply chain security and 3 methods to improve yours

Jonas Mehrhoff

In the volatile world of supply chains, risk manifests itself in many ways. As per BCI, the number of supply chain disruptions that organizations encountered in 2020 was higher than any other year, with 27.8% reporting more than 20 supply chain disruptions during 2020, up from just 4.8% reporting the same number in 2019. 89% of companies surveyed by Gartner said that they experienced a risk event in the past 5 years. As with any risk, there are also options in supply chain management to mitigate and manage these risks.

What is supply chain security

Supply chain security refers to managing and mitigating the risk related to suppliers, vendors, logistics, as well as all transportation.

How to assess your supply chain security: 5 risk management values

Risk management can be broken down into five key values. As a supply chain leader, these pillars should be at the forefront of any risk management initiative. The values include:

  1. A resilient supply chain is one that is able to return to its original form or evolve to a better, more desirable form after undergoing disruptions. Resilient supply chains are flexible, reliable, and adaptable- having the capability to adjust to new demands and change as required by the market. Companies can develop resilience by increasing redundancy, building flexibility, and creating a positive, forward thinking corporate culture.
  2. Agility in supply chains is critical, especially when facing the rapid fluctuations in both demand and supply. Many companies have had to change their strategies and create agility in their supply chains in light of the COVID-19 pandemic – switching between near-shoring, opting for air freight over sea freight for speed, and chartering ships and containers.
  3. Adaptability in supply chain management is vital in responding to fluctuating market patterns and trends. Tracking economic changes and exploring the needs of the end-user, who may not be the direct customer, is crucial to achieve adaptability.  
  4. Alignment of supply chain strategy is of critical importance and this alignment must happen not just internally but externally with vendors, suppliers, and other stakeholders in the supply chain. When everyone in the supply chain is aligned, the company is able to optimize its supply chain performance, maximize revenues, and achieve a competitive advantage.
  5. Real-time visibility provides the data required by supply chain managers to monitor and track market trends, as well as the movement of their respective supply chains. By tracking these changes globally, supply chain managers can make their supply chains adaptable and agile. For example, the creation of alternate supplier networks which may result in quicker lead times and cost-effectiveness apart from providing alternate sources. Real-time supply chain visibility aids in obtaining a better understanding of the performance in various parts of the supply chain, and can provide alerts on issues that could turn into problems.

5 best practices to manage risk in your supply chain today

Implementing day-to-day habits with risk management in mind can help mitigate these ever-evolving challenges before they become too big to handle. Some best practices include;

  1. Conducting regular supply chain audits in order to identify risks in exposure, supplier quality and OTIF patterns are a great, manageable task any company can adopt with ease.
  2. Setting up SOPs covering best practices that can be incorporated into supply chain operations/management is another habit to consider. To ensure everyone on your team is on the same page, you should consider creating a contingency/ business continuity plan aligned with that of the suppliers to ensure prompt delivery, financial integrity, compliance, risk profiles and sustainability.
  3. In addition to regular audits, stress tests on the supply chain can assist in checking for any hidden vulnerabilities as well.  
  4. Considering cyber risks are steadily increasing, assessing cyber security risk and its management through effective use of compliance standards, training, use of new-age digital supply chain platforms are key in modern supply chains. 
  5. Risk awareness training for staff is also a key area for supply chain risk management and mitigation. The training should typically cover the various categories of risk that the company and its supply chain can potentially face so everyone is as prepared as possible. 


While disruptions are inevitable, there are ways to combat the risks your supply chain faces every day. Having an action plan in mind is key and holding true to the values listed above ensures that your organization is prepared for any risk that may arise. Regularly test and asses your supply chain for weak spots and understand the protection of your supply chain starts with your team. Ensure your internal processes are strong and that your entire team is equipped with the tools and best practices to protect your supply chain for the future.

If you work with global supply chains, here are ways we can help you gain full control and visibility over your shipments.
If you’re operating with spreadsheets and disparate sources of data, learn more about how a digital platform can provide you with supply chain visibility in this free guide.
If you’d like to learn more about how to leverage your ERP with a supply chain platform, check out our free guide.
For more supply chain best practices, visit our resources page.
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