Skip to Navigation Skip to Content Home > Supply Chain > Inventory Management > Three Strategies to Safeguard Your Global Supply Chain Three Strategies to Safeguard Your Global Supply Chain What is in this article?: Trade Off a Little Performance for a Large Reduction in Risk Devise a Solid Plan for When Disaster Strikes For fear of hurting performance, many executives are reluctant to take steps to mitigate their company’s supply chain risk. But it is possible to boost performance while making supply chains more resilient. As manufacturers seek to source quality goods at the lowest cost, supply chains that were once confined to a single country or continent have stretched around the world. Managers have become adept at addressing recurrent risks—frequent, low-impact incidents such as demand fluctuations or supply delays that affect efficiency. However, they have devoted less energy to designing supply chains that prevent or mitigate the impact of disruptive risks such as labor strikes, political unrest, regulatory shifts, and natural disasters.

These events can have severe and lasting repercussions on operations, so manufacturers would do well to devise strategies that alleviate this risk. In the fluid environment found in many countries, disruptive events are a certainty; only the timing and magnitude are unknown. The challenge for manufacturers is to prepare for disruptive risks while maintaining the gains they have achieved from improved supply chain efficiency. Three strategies can help companies implement the necessary safeguards to reduce risk while improving performance. Contain the Impact of Supply Chain Disruption Complexity is a natural element of juggling the huge number of commodities flowing through a manufacturer’s supply chain. "Containing" the scope of the supply chain can lead to higher performance and lower risk by limiting disruptions to just one section of the supply chain. Large manufacturer can segment their supply chains to improve profits and contain the impact of a supply chain disruption. For high-volume commodity items with low demand uncertainty, the supply chain should have specialized and decentralized capacity.