What is Supply Chain Risk Management or SCRM?

If you manage a supply chain, you need to do all in your power to get the very best supply chain risk management or SCRM options at your disposal. It will not be easy to do that, and this is why you have to first identify the supply chain risk factors and deal with them to the best of your capabilities.

Supply Chain Risk Management Factors, and How to Minimize Them?

1. National or Local Regulations:

As you can imagine, this type of supply chain risk management is not under your control. Despite that, it can influence you quite a bit, which is exactly why you need to consul the regulations very often. The last thing you want to do regarding the SCRM is to go over some laws. So, try to keep that in mind as it’s very important and it can make a whole lot of a difference.

supply chain risk

2. Raw Material Prices and Labor Concerns:

Every supply chain focuses on a certain raw material price. If that price goes up, you can face some major issues. Obviously, when you do supply chain risk management you have to focus on raw materials. Labor problems as a SCRM factor can appear at all times for any supplier, so it’s crucial to deal with them to the best of your capabilities as fast as possible. It will not be easy to do that right from the start, but with the right approach you will see that nothing is impossible.

3. General Economic Conditions:

Economic problems will affect a country’s stability and thus supply chains will be affected. This is one of the supply risks you have to tackle early on if you want to reach the very best success and results.

4. Security Breaches:

Security problems like hacks and privacy concerns, theft or computer crime are quite common. These can also affect the supply chain. This is why you have to focus on doing supply chain risk management if you want to get the very best results and the utmost experience.


5. Currency Problems:

Currency problems can also be seen as a SCRM, especially since they tend to appear very often when a certain currency is fluctuating. Unfortunately, this is one of the risks that you have no control over. A good institute of supply chain management might be able to help here.

6. A Lower Demand of Products:

Obviously, if the demand is low, you will see that the supply chain will also get affected by this type of problem as well. It’s a very good idea to focus on studying the market at all times to avoid any potential losses at all times.

supply chain risk management

7. Business Interruption:

There are many factors which can cause business interruptions, starting with terrorist attacks, war, conflicts and natural disasters among many others. Most of the time these issues can’t be controlled or dealt with, so a proper way to eliminate the problem has to be found by each company. However, supply chain management best practices in these situations can minimize the risks.


As you can see, there are quite a lot of SCRM factors that you have to keep in mind. All of these risk factors can be very demanding and they might have some disastrous consequences if you don’t eliminate them fast. AIMS’ supply chain certification and mba supply chain management are helpful, so try to keep that in mind!

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