Supply Chain Risk

Supply Chain Risk encompasses vulnerabilities across the end-to-end network of suppliers, manufacturers, logistics providers, and distributors that deliver products or services to customers. Risks include supplier failures, transportation disruptions, quality issues, geopolitical events, natural disasters, and demand fluctuations. The COVID-19 pandemic dramatically illustrated supply chain fragility when global lockdowns disrupted production and logistics. For example, automotive manufacturers faced production shutdowns due to semiconductor chip shortages originating from Asian suppliers, highlighting concentration risks and prompting strategies like supplier diversification, nearshoring, and increased inventory buffers for critical components.