Mitigate Supply Chain Risks Before They Become a Reality

When it comes to supply chain management, even a small disruption in the supply chain can snowball into big problems—including production delays, increased costs, reduced margins, and lost revenue. Waiting for a crisis to hit is no longer an option. To stay competitive, brands must proactively address vulnerabilities and turn supply chain chaos into predictability.

The good news is that by having a risk management strategy, brands can build resilience and efficiency into their supply chains. Here’s how to identify risks, assess their impact, and implement ongoing mitigation strategies to not only prevent costly disruptions but also improve long-term supply chain performance.

Phase 1: Supply Chain Risk Identification

Map the Supply Chain to Create Risk Profiles

The first step in managing supply chain risks is to map out the entire supply chain and create risk profiles for each node—suppliers, manufacturing locations, and ports. This helps visualise weaknesses and strengths in the logistics network. Key considerations are

• Supplier concentration in geographic hotspots: Are your suppliers located in areas prone to natural disasters or political instability?
• Critical components and parts: Where do your most important components come from?

Next, map out routes and modes of transport to identify inefficiencies and potential risks, such as weather disruptions or port congestion. For example, a supplier in a hurricane-prone area may be more of a risk than one in a stable environment

Phase 2: Supply Chain Impact Assessment

Score Risk Profiles

Once risk profiles are created, the next step is to assess their impact. This involves scoring each risk against three criteria:

1. Business impact: How much revenue is at stake?
2. Likelihood of occurrence: What’s the probability of this risk happening?
3. Readiness: How prepared is your organization to respond?

Using a standardized scoring methodology ensures consistency and alignment with your company’s risk appetite. For example:

A high impact risk that’s likely to happen and your organization is not prepared would score high, meaning you need to act fast.

This systematic approach helps brands prioritise resources where they are needed most, so they are always ready to mitigate potential disruptions.

Phase 3: Supply Chain Risk Mitigation

Monitor Key Supply Chain Metrics

To stay ahead of high priority risks, brands should monitor key metrics that provide early warning signs. Here are five key metrics to track:

1. Days Estimated Lead Time: Helps forecast fulfillment times and build buffers into production schedules.
2. Days Before Estimated Ship Date: Shows when supplier lead times don’t match order timelines.
3. On-Time Delivery Performance: Tracks supplier and logistics partner reliability.
4. Customs Clearance Time: Identifies delays caused by documentation or regulatory issues.
5. Inventory Replenishment Time: Ensures stock levels meet customer demand.

By reviewing these metrics regularly, brands can spot trends, address deviations, and optimize the supply chain for peak efficiency and resilience.

Regular Supplier Assessments

Supplier performance is another area to mitigate risk. Regular assessments help flag risks and opportunities for improvement. Using supplier scorecards, brands can:

• Define meaningful KPIs
• Measure against benchmarks
• Conduct ongoing evaluations

This structured approach holds suppliers accountable and incentivizes them to address issues proactively so operations run smoother and partnership decisions are better.

The Key to Supply Chain Resilience: Visibility

Across all these strategies, one thing stands out: visibility. Risk identification and impact assessment only work when paired with real-time data analysis. Having the right information at the right time is key to making proactive decisions, timely interventions, and collaboration across stakeholders.

Get Supply Chain Risk Visibility with Sage

Sage Supply Chain Intelligence, integrated with Sage 100 ERP, gives you real-time visibility into your operations. This allows you to:

• Act on data-driven strategies
• Drive continuous improvement
• Build resilience against disruptions

With automated workflows and synchronized updates across teams, Sage keeps you informed and prepared.

By managing supply chain risk proactively, brands can turn vulnerabilities into opportunities for growth and efficiency. Don’t wait for a crisis—start building a resilient supply chain today.

Ready to get started? Get in touch to learn more about how Sage can help you mitigate risks and improve performance.