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2 key questions you must ask to understand your supply chain risks.

Many tools on the market promise you supply chain risk assessment, and they are pretty good to assess your external supply chain risk.

But is it your company's unique risk? Probably not.

Question number 1: What is the revenue loss risk? What percentage of revenue will be at risk in case a specific part of the supply chain will be doomed? You may be surprised to find out that maybe some unique single-source fasteners cost pennies used in all your products and impact 80% of your revenue.

Question number 2: What is the revenue recovery time? This question is connected to the first but it is taking care of recovery time, which means how long it will take to recover your revenue in case a specific part just disappeared. For example, your single-source FET plating facility burned down. How long it will take to test and approve another manufacturer? You must ask engineering about another source testing and approval time or redesign time. In many cases, the answer will be something like it’s impossible or it will take 3 years, and it’s OK, some parts are easy to recover, and some are not.

The answer to these 2 key questions will help you to prioritize your risk mitigation plan and to define the type of solution.

Contact us if you need help with Risk model development:

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