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  • Rony Grynholc

Managing Sourcing Risk


Our company has helped many customers to build a resilient supply chain.

As part of our experience, we recommend to monitor the supply chain constantly.

High Risk Of Supply Disruption:

HIGH REVENUE IMPACT if supplier or part(s) is lost

  • Monitor suppliers 24/7.

  • Buy insurance to cover profits lost from a disruptive event at critical suppliers’ sites.

  • Work with sole-source suppliers to develop alternate source.

  • Know where suppliers build and store your parts and raw materials.

  • Ask sole-source suppliers to build and store parts at alternate sites.

  • Identify and monitor the sub-tier suppliers that your Tier 1 suppliers use for critical parts or materials.

  • Ensure Tier 1 suppliers have comprehensive risk management programs (i.e., they map and monitor their suppliers, adding alternate sources for their highest-risk suppliers).

LOW REVENUE IMPACT if supplier or part(s) is lost

  • Monitor suppliers 24/7.

  • Know where suppliers build and store your parts and raw materials.

  • Identify sub-tier suppliers and sites.

  • Ask suppliers to build and store parts in multiple sites (particularly when an alternate supplier cannot be found).

  • Ensure Tier 1 suppliers have comprehensive risk management programs (i.e., they map and monitor their suppliers, adding alternate sources for their highest-risk suppliers).

Lowe Risk Of Supply Disruption:

HIGH REVENUE IMPACT if supplier or part(s) is lost

  • Monitor suppliers 24/7.

  • Source from two suppliers (75%–25%) rather than one.

  • Map suppliers’ manufacturing, warehouse, and distribution sites to ensure they’re not all in the same region.

  • Identify the Tier 2 suppliers that Tier 1 suppliers use for critical parts or materials.

  • Buy insurance to cover profits lost from a disruptive event at critical suppliers’ sites.

LOW REVENUE IMPACT if supplier or part(s) is lost

  • Monitor suppliers for shifts that might increase their risk, such as a corporate restructuring, M&A, profit warning, lawsuits, etc.

  • Know where suppliers’ manufacturing and warehousing sites are located, and seek geographic diversity to avoid total loss of supply in future natural disasters.

  • Identify suppliers that rely on the same sub-tier suppliers for critical materials.

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