More than ever, the Covid-19 pandemic highlighted the importance of sound risk management strategies. Risks are, by their very nature, unpredictable. In the months leading up to the pandemic, few could have fathomed its devastating effects on human life and the economy.

The leaders in the MRO (maintenance, repair and operations) sector took note and adapted as well.

As reported by McKinsey, supply chain disruptions occur on average every 3.7 years, and these disruptions can last from one month to several months. The world we live in is a globally integrated one that has complex supply chains that are more vulnerable than ever to climate change, geopolitical uncertainty, instances of cyberattacks, among a plethora of other factors that industry professionals are already alerted to.

This fact alone necessitates a rethinking of the way risk factors are assessed and mitigated.

Management of Risk Challenges
Identifying and prioritizing current risks are key aspects of supply chain risk mitigation strategies, according to CIPS. Supplier quality and sustainability require effective due diligence and reviewing risk profiles on a regular basis is critical and crucial.

In addition to lockdowns and social distancing measures, the pandemic caused additional challenges, such as increasing supply chain fraud, especially related to the supply of personal protective equipment, and shortening supply chains to source more locally.

Most importantly, organizations must recognize risk management as a shared responsibility, not just the responsibility of procurement, since operational teams often become aware of risks before anyone else does.

Based on Price Waterhouse Cooper's Supplier Relationship Management report, turning supplier relationships into strategic partnerships is a key lever for an organization to compete more effectively.

The main objectives of supply chain professionals are sustainable sourcing, managing supply risks, and

improving supply security. A dedicated program manager should be assigned to supplier relationship management programs.

All of this will help procurement teams handle future exigencies better.

Embrace Change:
Culture eats strategy for breakfast, to get risk management right, business culture is key. Everyone in the organization must feel empowered to speak up when they see a risk.

Furthermore, procurement teams should research changing market trends to identify current and future risks while considering the rapid rise in environmental, social, and governance (ESG) changes, it is essential to identify wider business risks that directly affect procurement.

the good news is that more credible sources of risk data and trend analysis are emerging. This means procurement teams can now concentrate on organizing and managing the response

Embrace Technology:
The use of technology and data can provide procurement leaders with a clear picture of the risk landscape they inhabit and the need to understand those risks using market research, according to an industry expert.

Traditionally it has been difficult for procurement teams to get quality input data and information sources. However, the good news is that more credible sources of risk data and trend analysis are emerging. This means procurement teams can now concentrate on organizing and managing the response.

Future negotiations, quarterly business reviews and supplier performance reviews will be more technology-driven.

COVID-19 has undoubtedly challenged any belief that risk management is simply a tick-box exercise. A recurrence of supply chain chaos can be prevented by implementing mitigation strategies. The most effective and simple way to accomplish this is to have everyone involved since even the youngest employees can provide insights into the risks facing the business.

As the adage goes, Prevention is Better than Cure, saves time, money and effort for management leaders.