While building a risk matrix for the Red Sea crisis is a must for manufacturers, you should still take a step back even further.
Today it’s the Houthi rebels seizing containers in the Red Sea, but tomorrow it could be a traffic jam in the Panama Canal, a hurricane that hits a major shipping port or a public health emergency that shuts down suppliers.
A risk matrix provides a strong defense, but a solid risk-management strategy should include an aggressive offensive. Consider tactics like dual-sourcing materials and supplies, nearshoring manufacturing, or reshoring the supply chain.
Bill Remy, TBM's CEO, talks about some questions and recommendations manufacturers should ask themselves when developing a risk matrix for handling supply chain disruptions:
- What can go wrong?
- What’s the likelihood of it happening?
- What is the impact?
- What will we do?
- How well will it work?
- How long will it last?
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