Global supply chains are a way of life for modern businesses, but in the constant search for affordable labor and services, new challenges and risks continue to emerge.

The 2011 Tohoku, Japan earthquake and tsunami drove home the realization that a single point of failure at a single link can halt the flow of goods across an entire supply chain. To meet these challenges, businesses are finding new ways to increase communication and coordination across their supply chains, using technology to integrate systems and create contingency plans should a supplier be taken offline for any reason.

Supply chain risk

The evolution of supply chain development has brought with it an evolution of risks. Potential risks come from many directions and are not limited to physical production but include dependency on vendors for payroll, social services and benefits and causes include, for example, natural catastrophes, political risk and machine failure. Beyond the flow of goods, the quality of products can be compromised at any point along a supply chain, from the raw materials to the semi-finished product.