Predict, Not Just Respond

Automatic Risk Analysis

Automatic Risk Analysis

How to Avoid Future Supply Chain Risks

One of the major functions of every corporation is to mitigate risk as much as possible. This is particularly true in the case of supply chain risks. Supply chains are vulnerable to many different factors most of which are outside of the control of the company. Some examples are Acts of God, geopolitical issues and sanctions, supplier and customer uncertainties, safety and ethical issues such as child labor. There is not much that the company can do to prevent such events, however company does have control over how to address the problems and mitigate the risk when they occur. Adexa’s Risk Management system is designed to detect points of high risk that make the supply chain vulnerable.  Some examples are single source suppliers, expected low inventory items for some key parts, changing trends in delivery schedules of some suppliers, long lead-time parts that can cause delays.

At the conclusion of every plan generation, the system flags all the potential risks and shows where the issue is and what can be done to avoid them. For example, too much use of a substitute part is an indication of increasing cost and low level of inventory for a key part#. By recommending to increase the minimum inventory level of that part#, the issue is avoided in future. Some of Adexa’s clients, perform risk management using the what-if scenario management of Adexa. Adexa’s incremental planning feature allows changing certain parameters and then looking at the potential issues that may arise. For example, if an earthquake in a region in Asia causes delays in deliveries of a certain part number, then what would be the outcome on production and meeting the expected demand, what alternatives are there and how much is the potential financial risk. Learn more about Adexa’s Risk Management solutions by sending an email to

Participate in Adexa’s LinkedIn Group:  Supply Chain Risk Management Strategies Counsel (SCRMS).  Share information and best practices, get help, provide mentoring and connect with like minded people on how to manage supply chain risk

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At Adexa we believe, risk management as related to the supply chain, is a growing concern amongst the best run companies. The main question is what the level of risk is and the associated cost to the company would be, as well as potential lost revenue. And what can be done about it?

There is risk in almost everything we do. It is unavoidable. Supply chains are no exception facing all kinds of unexpected but inevitable surprises that can be very costly to the company. It is imperative that the management is prepared to deal with such unfavorable incidents without building too much redundancy and increasing the cost of operations.

Related BLOG Post

Risk Management: Run Your Supply Chain Like an Insurance Company

Supply Chain Risk and How to Mitigate